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Well, you need to get your pre-keyed image/video into your video bar (not the timeline), and then select it (it should be outlined with yellow). Drag the pre-keyed thing into the timeline, onto the other video, where you want it to appear. Then, let go of it, and a little menue should appear. Select "Picture in a picture". Then you should be able to manipulate it (with size and area), and that's how it's done.

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