right click... effects fade in/out to black or white....
that's your drum beat flash, but it applies it to the start or end of the clip on the timeline... which means you need to cut your clips smaller.
or you can put a jpeg/png picture in any colour on the timeline and corssfade it between clips.
If you read the sticky
it links you to additional effects for WMM called *PIP (picture in picture) which allow you to have 2 clips playing at once
because I'm at work i can't see the video you linked on youtube but i used those effects in this video if that's the type of effect you are referring too