Yes. Windows Movie Maker has a video Overlay. It is located in the Timeline view only though.

When you put a title (words) over the actually video.

Most do Even windows movie maker can have overlays

You can't overlay a photo on Windows Live Movie Maker (2011). Only text can be overlaid.

There are two tracks of audio for Windows Movie Maker. One track for the audio in the video you imported and another to add sound effects or a musical overlay. If you want to have both a musical overlay and sound effects, you just have to create your video with the music overlay or sound effects that you want first. Then, re-import the completed video with the sound effects or music overlay on it, and you'll you have fresh audio track to add whatever you want again. This is a "dirty" way to add as many sound tracks as you want using Moviemaker.