There are many ways to do this. One simple one is the "favorites" method you mentioned. Scan through the clip and mark an in & out for a section you like. Hit the "F" key. Move on and do the same (even in the same shot) for the next section you like. Once all of your footage has been marked like this you can choose to show only favorites and everything you have to choose from is good stuff. Good luck.
This is my usual method...
Use favourites to label only the best moments of a clip.
Use keywords to label only ranges of clips... (I usually keep them broad in scope. usually: themes, topics, visuals, and the like.). So I might have "Beaches" as a keyword; this could mean it's visuals of a beach, or somebody talking about beaches, or whatever falls broadly under "beaches". I'll use multiple keywords to describe a range as well; Adding both 'Visuals', and 'Beaches' and whatever else needed to a range
Markers get used as Dialogue pointers. (I'll add a quote as the marker name, or in the notes field.)
I'll further use the notes field in the metadata to do a very broad grouping of clips. I work a lot in a documentary setting , so I'll add things like, Interview, or vérité to the notes field, then I'll make Smart collections that collect those clips for me.
With this method, I can click a keyword, look at all the content available, see all my favourites, and see dialogue moments within those keywords.
if you hold option while clicking and dragging on a clip in the browser it will 'override' any proviso selections you have made.
holding command will allow you to make multiple selections at once.
'x' will select the entire clip you are currently working with.
"option + x" will clear selections on selected clips.
shift + i and o will place the play head at the top and tail of selected ranges.
Also, the "Skimmer Info" feature, is your friend. I keep it on almost always.
Sharp Shooter wrote: ....So what I'm doing is adding the video into my timeline and cutting out the parts I don't like. Now my time line is full of stuff I like but it's all cut up..
Definitely do not do this. That is the old way. It is much better to use new FCPX technique of marking favorites, rejects and keyword collections in the Event Browser *before* touching the timeline. Run the browser filter in "hide rejected". Also get used to using the query system to search for material.
See the video "One Smart Collection To Rule Them All". You don't have to use this method but it gives an idea of how powerful the FCPX database and query system are: