Work in the Canvas
Let's take a look at the canvas. You will see the following:
The layer we are working on has now been stretched to (a little more than) twice the regular size and therefore overlaps the canvas. To the left you see the Swan video. To the right you see the Seagull video. Both videos have a 7x7 grid applied to it.
At first we start with the swan video. Drag the video layer with the mouse in the canvas to the right, so we can see the full Swan video. Our next step is to animate the grids.
Note: Take care that you don't accidently drag a point instead of the video layer.
Move the playhead to the first frame of the video. As we want to edit a video the red Record button should also be activated in order to keyframe all points automatically.
Move the Points
Now it's time to move some points. All points can directly be moved in the canvas with the mouse. Move the points in such a manner that they surround the shape of the object the you want to morph. When you're done with the left (Source) video, move the video layer over to the left, so you can see the right (Destination) video. Surround the shape of the object you want to morph in the same way as the Source video.
Make sure that you use the "same" points for the Destination video. Therefore the grid is colored the same way for the Source and Destination video.
A good working grid for both videos should look like this:
Take a look at the Result
Switch the Mode popup menu to Render Final. Now drag the video layer to the center of the canvas, so you can see the full video.