[Aren Siekmeier]

Originally Posted by Ether

Surprisingly, the above answer is not correct. It is the heart of Einstein's theory of relativity and why it was so profound a discovery that changed the face of physics.

An observer sitting on Particle B (i.e., in reference frame X'Y') will observe Particle A's speed to be

(c/2)(c/2)/(1+(c/2)(c/2)/c^2) = 0.8*c

^ninja'd (sort of)

And yeah that. That's the velocity transform: u' = (u+v)/(1+uv/c^2), u is the particle's velocity, v is the velocity of the prime frame relative to the non-prime frame.