Composite footage are .mov files that can be used as alpha-channel Overlays above your videos in the timeline. Some of our plugins, such as FCPX Glitch, Grunge, ProFire, ProPixie, etc. come with composite footage as part of the plugin.
Since Composite footage are .mov video files, they are not installed to Final Cut Pro in the same way as a set of plugin tools. They can be imported to Final Cut Pro the same as other video files, and used as overlays on top of your video.