What version of Premiere Elements are you using and on what computer operating system is it running?
In what workspace are you working...
for Premiere Elements 10 and earlier...Timeline workspace or Sceneline workspace
for Premiere Elements 11 and later....Expert or Quick workspace?
I suspect that you are in the Sceneline of a version 10 or earlier.
I am just about ready to call it a day and you still have not had a chance to reply to the requested details so that I can customize a reply for you.
In the likelihood that you will get back to this thread before me, I am going to take a guess of what you are trying to do and offer a how to.
1. Based on your description so far, I think that you are in the Sceneline workspace of Premiere Elements 10 or earlier.
2. You would take your background video into the Filmstrip scene space 1.
3. If you want to do your Windows key + E to grab your picture, fine. But when you click and drag from your hard drive drive location into Premiere Elements, I find it necessary to click and drag into the Project media section first. Then from there, as I hold down the Shift key, I click and drag the picture insert into the monitor to get the pop up menu which includes the option for Picture in Picture.
4. You will not see the picture insert's "purple bar" unless you left click the picture in the picture in picture image that you have displaying in the monitor (it should be displaying with it bounding box with handles). I believe this is your missing ingredient in what you are doing. When you select the background image instead of the picture, the picture's purple bar will disappear from sight.
Please review and consider.
Hello, I was able to figure it out. I'm on elements 13 and I was in the quick workspace rather than the expert version like I should have been. I was able to edit the picture and picture. Thank you!
Thanks for the update with the great news. Well done.
I was going to go into my usual about using the Timeline workspace (10 and earlier) and Expert workspace (11 and higher), but decided to give you what you what I guessed at for what you were asking (Sceneline or Quick perspective).
The Expert workspace is my preferred workspace. All of its features are not represented in Quick. And, you can see better what you are doing in Expert and consequently have more control of the workflow. Although you can still do picture in picture in Quick, best use Expert as you did.