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There is an option in iMovie to create a picture in picture effect. This can be done with both
videos and images. First, make sure that the Advanced Options panel is open by clicking
iMovie>Preferences, clicking General at the top of the pane, and then select Show Advanced
Tools. Select the clip or image that you wish to inset, and then drag it onto the desired
part of your movie. A new window will pop up with a list of options. Select picture
in picture. Notice that your clip or image is inset onto the background clip or image.
You may change the size of the inset clip by clicking on one of the corners and dragging
it to the desired size. You can also move it to a different part of the background by
clicking and dragging.