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You mean like a picture-in-picture? Absolutely!
In fact, in the Effects/Presets folder, you'll find a number of picture-in-picture presets. (And, of course, it's easy to custom create the effect yourself too.) Just be sure to work in Timeline mode and to put one clip on Video 1 and the other on Video 2 before you apply the effect.
Along with PiP (Picture in Picture), you might want to also read up on the Crop Effect, and Track Matte Keying, as both can allow for quite a bit of creativity with PiP. The Motion>Scale Effect is also quite useful for PiP work.
As Steve states, your capabilities are almost endless, and PE does give you some Presets to get you started with.
If you find that you get stuck, and the Presets do not do what you want, post back with the details of what you have, and what you want, and someone will come through with the steps to help you attain your goal.
Thanks for the help! I can get to the PiP, but how to I get the movement to go faster? I Need the PiP to be there for a few seconds and then take over the entire frame. Also, can you help me create my own PiP? Thanks!
To create your own PiP, put one video on Video track 1 and the other on Video track 2. Right-click on the Video 2 track and select Show Properties and then, in the Properties panel, open the Motion properties and set Scale to 25% and drag it into position in the Monitor panel.
You can also use keyframing to add motion to the PiPs.
Blending your first question in post 3, with Steve's directions in post 4, you can Keyframe the Motion>Scale, so that it goes from the 25% up to 100%. Depending on where you locate it in the frame, you will probably want to Keyframe Motion>Position, as well, to have it end up centered. Don't worry, you are almost there.
Steve can correct me if I'm wrong, but I believe that there are several Keyframe tutorials at www.muvipix.com. I think he may have written some of them.
There's one here in fact!
I think you'll need to register to the site to download it, but the registration and article are free.