What version of Director are you using? What are your target platforms? Is this for Shockwave or for a projector (stand-alone executable)? What file format are your videos?
Director allows you to play videos in two different ways: direct-to-stage and non direct-to-stage. In versions of Director prior to 11.5, it was best to play videos direct-to-stage (DTS). This means that Director simply asked the operating system to blit the video to the screen directly. This gives much better performance. The downside is that any DTS video content appears above all other content. DTS video ignores the layering effect provided by sprite channels.
The easiest solution is to select the video member or sprite in the Property Inspector, click on the <member.type> tab (QuickTime, MP4 Media, ...), and deselect the DTS checkbox. This will force Director to take care of blitting the video to the screen itself, respecting the sprite channel layering.
An alternative (if you do not need to work with Shockwave) would be to show the overlaid video in a separate window (Movie In A Window, or MIAW).
Please don't hesitate to ask for more details if any of this sounds obscure to you.
Thank you for your reply. I am using version 11.5 and the videos are in a QuickTime format. The solution that you have given me to deselect the DTS has allowed me to overlap the videos however, when i deselect the DTS option I am unable to have the video control for my video, which I also need. Do you you have a solution so that I can have the two videos overlapping and still have the video control?
It's not too difficult to create your own video transport control. I don't have a video control on line, but you can find a demo movie with controls for audio >here<. You can find a behavior for a Digital Video Button Control >here (disclaimer: I have not used this behavior so I cannot comment on its suitability).
There may be others who can suggest other drag-and-drop solutions. If not, I'll see if I can find a video controller in my archives for you.