When importing RED footage in Flame Premium, you can transcode the media prior to import. The transcode settings determine the resolution, bit depth, colour settings, etc. of the media created from your R3D files. If you choose to soft-import your media (i.e. linking to the media from its original location), you are able to access the media at any of the resolutions supported by its debayer in Lustre, after importing the timeline. This can be helpful for grading, where a high level of detail can sometimes be critical.
To illustrate this workflow, we are importing an FCP xml file and soft-importing its associated RED sources for conforming in Smoke. We then import the Flame Premium sequence in Lustre, where we can modify the media's transcode settings to perform our grading tasks on the full resolution footage. Once done, we render the sequence back to Smoke for further enhancement.
We are assuming that you have already created your Flame Premium and Lustre projects and that the Lustre library has already been generated.
Importing RED footage to Flame Premium
You can apply resize settings and apply a LUT on import from the Transcode menu. See
If you want to change the transcode settings of your media, you can do so from the File I/O menu under the Media Browser prior to importing. If you don't make any changes, the media is imported with the camera settings.

Smoke finds the sources and reassembles the sequence.
Your sequence is now available in Flame Premium for editing. Once you are satisfied with the sequence and are ready for grading in Lustre, save it to a library and exit Smoke.
Accessing the Flame Premium sequence for grading in Lustre
Because we are working with soft-imported RED footage, once the Flame Premium sequence is imported into Lustre, you can modify the transcode settings set in Flame Premium and access the footage at up to full resolution for grading.
To access the Flame Premium sequence from Lustre
The sequence and its associated sources are automatically added to the Library.
Modifiying the Flame Premium transcode settings
Access the Image/Transcode menu. You can modify any of the transcode settings that you like; one of which being the debayering settings. Changing the debayering settings will enable you to work at any of the resolutions supported by the debayer: a higher resolution for greater detail or a lower resolution for more responsiveness. The resolution of the media is immediately updated in the viewport and you are ready to grade your sources.

Footage taken from "Other People's Children", courtesy of Golden Films.
Once you are happy with your grades, you have a few options:
Render the sequence back to Flame Premium for further enhancement. Lustre creates new (graded) sources and a new sequence (containing all the metadata from the original sequence). The format of the footage is no longer RED media. Instead the sources are in uncompressed RGB, on the Flame Premium Standard fs.
Render the final version from Lustre as one sequence in an uncompressed format to a location outside the Standard fs.
See Rendering and Exporting in Lustre.
For more details on rendering media in Lustre, see About Rendering in Lustre.
Export the final version from Lustre to a compressed format to a location outside of the Standard fs.
See Rendering and Exporting in Lustre.
For more details on exporting media from Lustre, see Background Media Export.