To apply the Channel Blur, go to Effect, Blur & Sharpen, Channel Blur. The Channel Blur effect individually blurs the red, green, blue, or alpha channels of a layer.
If you are working with a layer with transparency, such as some green screen footage, and you blur the alpha channel, you will get a black halo. In order to fix this, use the CC Composite effect under Effect, Channel, CC Composite. Set the Composite Original dropdown to Stencil Alpha, and the halo disappears. This combination of effects creates a basic light wrap around your edges that can help blend your keyed footage with the background.
This effect is also useful if you have noise or artifacts in one color channel, such as MPEG compression artifacts in the blue channel of DV footage. To illustrate this, I generated some exaggerated blue noise on my footage. The red channel doesn’t look too bad, and the green channel isn’t terrible, but the blue channel has a crazy amount of noise. So we add the channel blur. If we just slightly blur the blue channel, the noise begins to fade away, leaving the other channels sharp. We can even blur the red and green channels a bit, and the noise is now barely visible, and it hasn’t affected the quality of our footage too much.