How is this effect done?

You just motion track your plates into the frames and rotoscope anything that goes in front the footage. Google motion tracking and you'll probably find plenty of tutorials.
 
Its clear to see hwo this effect is done, first, she unzips her jacket, then she removes said jacket, then she bounces aroudn and grabs her chest while a topless girl is on the board behind her wiping her sweatty self down with a towel.

That is how you achive that desired effect. lol
 
There's some pretty complex layering going on here. Firstly, they're keying in two separate colors - green and blue. Layer one is the singer performing the entire song in front of a chroma screen with the plant and keyboard. At 1:57 they choreograph a exchange between her and LAYER 2. Layer 2 the actor performing in front either green or blue with specially prepared paper 'frames'. If he is in front of a greenscreen, then the paper frames are colored BLUE and probably have Xs painted onto the corners to allow the motion tracker to do it's thing on 4 points (rotation, scale, and motion).

Each piece of paper has a white frame and it's individually tracked and assigned to a null layer. That null layer is then assigned one of the videos.

Since each picture frame is keyed, they pull a quick matte for anything that passes in front of the image.

It's not difficult but it is a bit time consuming and you need a REALLY POWERFUL computer to handle this much layering.
 
It's not difficult but it is a bit time consuming and you need a REALLY POWERFUL computer to handle this much layering.

Sure, if you do everything in a single project.

I would work on the individual layers and then composite them together at the end rather than try and do it all together.
 
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