They are three modes in VSE. I think I know what the Alpha Over and Alpha Under do. But I'm still puzzling when trying to understand what the key difference the Over Drop is from the other two. I've looked them up in BlenderWiki here, but still no clue. Can any one tell more about this mode? Illustration or blend file would be much helpful here.
To my surprise, my following report here confirmed that there was something wrong here since 2.4x. Thanks to psy-fi (Antony Riakiotakis), the developer who has helped to fix it in commits here and here.
Now it makes sense that, as Wiki said, Over Drop is actually a "mixture" of Alpha Over and Alpha Under. In other words, the first selected strip would be the foreground (same as Alpha Under), while the fade value also controls this foreground (same as Alpha Over).
For easy understanding:
It makes the top strip apply to the foreground, using the bottom strip's alpha.
Alpha Over Drop is between the two others: as with Alpha Under, the first strip selected will be the foreground, but as with Alpha Over, the Factor controls the transparency of this foreground.
Essentially, it multiplies the first strip with the alpha of the second one.