For the overlay see the following link:
PIP PLUS
http://www.rehanfx.org/pipplus.htm
To insert still shots in the video....the following
steps may be useful:
Drag a second instance of your video clip to
the Audio/Music track. Split the video track before
and after the point where the still will be inserted
and delete the unwanted portion. Now insert a still
shot of the same duration as the removed section.
Here's a slightly different method:
Split your video clip on each side of the
area where the stills will be. Now...drag
the cut portion to the Audio/Music track.
BTW...If you wish to add a 5 second still...
remove 5 seconds of the video clip.
(info below on splitting if you need it)
Drag your still shots to the time line and
drop them in the location where you
removed the video.
The Audio clip on the Audio/Music track
can be dragged right or left to adjust it's
position.