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http://steamcommunity.com/sharedfiles/filedetails/?id=396495497
By default, each video added will have a Pan / Crop FX Plug-In. Open that FX on your 2nd video and you can then easily edit it (adjust the size - left-click to grab-and-hold a corner-handle to resize - of the video and then position it where you like on top of the other video. Use mouse-wheel to zoom in or zoom out accordingly while editing in this FX Plug-In).
If you had a "green-screen" on your 2nd video, you could even enable and adjust the Chroma-Key FX Plug-In to have the background (or the Green-Screen) be transparent.
As an example, here's a silly video I made recently using the above mentioned techniques with to have a PiP and with a transparent background on my 2nd video (so you'll see the silly "Mittens" cat-character overlayed on top of the other video):
http://steamcommunity.com/sharedfiles/filedetails/?id=426658781