If I understand correctly, then yes. After you have Imported your Assets, i.e. your Video Clips and your still images into the Project, you just drag what you want, and in the order that you want these, from the Project Panel to the Timeline. Note: before you Import your sill images, you might want to go to Edit>Preferences and choose the Duration that you will want these to come in with. You can drag them longer, or shorter, but I like to get them about right, before Import, as it can save time later.
Between the Video Clips and the still images, you can add Transitions. Note: for the Video Clips, you will want to set In and Out Points to give you a few frames of Handles for the Transitions to work with.
Hope that this helps. Good luck,
As Hunt says, or in Timeline mode you can place the video on track 1 and your photos on track 2. When playing back the timeline anything on track 2 will play over anything on track 1. However using this technique you can not add transitions between the video and photos. You can have them fade in and out by right clicking on the photos and selecting fade in and fade out. Keyframes will automatically be placed to give the fade in and out.
As I'm working, I stack the clips on tracks(typically limit to three). As Paul notes the highest track will be what's shown. Stacking them lets me see the general flow and even synch the cuts with music.
Then, I typically cut the segments and place them on a single track. Then I can fiddle with the transitions on a single track. Plus it makes the project's workspace cleaner.