Here’s an intro for the Digital Anarchy tool, which might be handy if you don’t have one of the big plug-in suites. (See also Kevin McAuliffe‘s later review of this plug-in here on PVC.)
There are some Red Giant tutorials on Light Wraps, with and without extra AE filters found in several packages: RGTV Ep. 16: Better Compositing with Light Wraps and More Techniques for Better Light Wraps. The latter tutorial considers Maltaannon’s ceLightWrap, a custom effect that may not still be supported in AE. Red Giant inherited the first Lightwrap filter for After Effects from the handy ISFX Matte Wizard, which later became Composite Wizard (the 8-bpc version), and then Key Correct Pro. Other 3rd party light wrap filters can be found in sets from Digital Film Tools, Boris FX, Digieffects, Hitfilm Plugins, and Genarts.
Chris and Trish Meyer have a free written After Effects tutorial on Artbeats, Light Wrap: How to help keyed footage and 3D renders sink into their new backgrounds (pictured). And as you might imagine, building light wraps is also covered in After Effects Visual Effects and Compositing Studio Techniques by Mark Christiansen, which ships with scripts for light wrapping and camera mapping, courtesy of Jeff Almasol. Simon Bjork’s script, sb EdgeBlend, uses Mark’s technique.
Andrew Devis has a quicktip video tutorial (below) that uses the Set Matte effect to build a light wrap blend quickly for a composite: Lite Bite for After Effects: How do I create a simple Light Wrap? Previous tutorials, typically for greenscreen keys, used somewhat different approaches.
Also, Sean Kennedy posted Lightwrap and Edge Blur to show some simple techniques, and Mylenium added a method to the Adobe forum:
“Assuming your character is separate from your character:
a) Duplicate the layer 2 times, I will call this Layer A (on top) and Layer B (below)
b) Layer B: Effect—> Channel—> Invert, set to Alpha
c) Layer B: Effect—> Channel—> Minimax or Effect—> Matte—> Simple Choker to expand
d) Layer B: Effect—> Generate—> Fill
e) Layer B: Effect—> Blur and sharpen—> Box Blur
f) Use Layer A as a matte on Layer B
g) Set Layer A to Add blending mode
If you want to use complex background colors, another level of matting and nesting is required, where the result of the foreground would act as a matte on the background, then blurred. If you have CS3 or CS4, Photoshop Layer Styles (Inner Glow) are also available. Of course any variation on the theme is possible by throwing more effects into the pot or using different methods…”
Laurence Grayson noted a newer but common approach, “A quick and dirty lightwrap technique is to simply use Layer Styles – Inner Glow, set the blend mode to Soft Light and select the most prevalent BG colour with the eyedropper. It ain’t perfect, but it’s heaps faster and takes a LOT less time and effort.”
There are a number of video tutorials that show how to build a light wrap, like Lightwrap Tutorial (With Free preset). Here’s a few: by Andrew Devis, How to create Light Wrap and Edge blur by Kert Gartner, and one by Lake Keene from How to build a lightwrap in After Effects and Keying in After Effects with Keylight + light wrapping:
More recent tutorials include Easy light wrap in After Effects by Mikey Borup on how to use Set Matte, Fast Blur, and Channel Blur to create a light wrap, and Light Wrapping in After Effects by Marcos Salvi. The simplest way, Light Wrap in After Effects with no Plugins in video from Ryan Somerville, is explained in context by the School of Motion in Tracking & Keying Part 2 (after 49 minutes).