What is a Matte?
A matte is a "hole" which can display an image, a color or a texture. (Note: Version 4 allows you to use a matte and a border at the same time.) Mattes can also be applied to text.
The default matte for a new image frame is a straight-edged rectangular shape.
The default matte can be replaced many different types of mattes:

Image by Stephen Eastwood
Mattes are useful for giving your images a unique look, and also to create decorative elements on your page when you apply background textures to them.
Mattes are stored in a specific folder in the FotoFusion installation, or on the LumaPix server.
You can scroll through the list of mattes to make a selection or use the Search hover to look for "mattes". On the seach hover, mattes stored locally on your system (downloaded with FotoFusion automatically) will display under the Mine tab. Mattes available on the LumaPix server will display under the Free tab (for those included with your license), or the Premium and Purchased tab (for those that need to be added to your collection with dotScrap credits).
You can create your own custom mattes using external graphics tools and saving them in the C:\Program Files\LumaPix\FotoFusion V4\Mattes folder. You will need to use the Organizer to categorize them as mattes, so FotoFusion will recognize them properly and apply them onto images and text.

Matte attributes can be edited in the Frame Editor.
Select any frame on the canvas, or multiple frames, and click on the border portion of the Toolbox to launch the Frame Editor.

Photo by David Ziser
Alpha Only/RBG
This drop-box option allows you to select how mattes will work based on the presence of transparency channels in the matte image file.
Mattes saved as jpg only hold RGB channels; mattes saved as png will hold RGBA channels (A= transparency).
Alpha only will use the alpha channel in a png mat; Average RGB will act on jpg format mattes, where black = transparent and white = opaque (or reversed). Alpha plus RGB is refers to the way that FotoFusion used to handle mattes in Version 3, and has been retained to allow Version 3 mattes to continue to function as expected.
Soften
The edges of the matte can be progressively softened inward with this control.
To soften the edges of a rectangular shaped frame in this manner, select the Rectangle matte.
Invert
This toggle allows you to invert the matte, making positive space negative and vice versa.
Lock
This toggle controls whether the matte resizes with the frame it is applied to or remains fixed at an internal aspect ratio.
Crop
This toggles controls whether the matte extends beyond the perimeter of the frame, or is contained solely within the frame.