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This paper demonstrates the high quality, real-time segmentation techniques. We achieve real-time segmentation of foreground from background layers in stereo video sequences. Automatic separation of layers from colour/contrast or from stereo alone is known to be error-prone. Here, colour, contrast and stereo matching information are fused to infer layers accurately and efficiently. The first algorithm, layered dynamic programming (LDP), solves stereo in an extended 6-state space that represents both foreground/background layers and occluded regions. The stereo-match likelihood is then fused with a contrast-sensitive colour model that is learned on the fly, and stereo disparities are obtained by dynamic programming. The second algorithm, layered graph cut (LGC), does not directly solve stereo. Instead the stereo match likelihood is marginalised over foreground and background hypotheses, and fused with a contrast-sensitive colour model like the one used in LDP. Segmentation is solved efficiently by ternary graph cut. Both algorithms are evaluated with respect to ground truth data and found to have similar performance, substantially better than stereo or colour/contrast alone. However, their characteristics with respect to computational efficiency are rather different. The algorithms are demonstrated in the application of background substitution and shown to give good quality composite video output.