What video editing software + video recording program should I use?

[SoupOrJuice]

I'm trying to make video game Let's Plays (PC games only). I'm currently using Bandicam, but what are others' preferences in terms of recording software? Bandicam's files are a good size (not giant like FRAPs), and are even better quality than any other recording software I've used, FRAPs included. But anything you guys use that gets really good quality (good enough to read the text on-screen in the video, at maybe 14pt font)?

But the main reason I'm putting this here is to ask about video editing software.

So, here's EXACTLY what I need to do, no more no less:
- Add video
- Add an additional (VO) track, in sync with video
- Sometimes, add an additional (webcam) video clip, PIP-style, overlayed on the original video
- In the future, overlay a simple graphic onto the entire video
- At the end, have a screen with some text in the middle, bottom, and top corners (with more overlayed video clips in the top corners as well)


I can't find anywhere anyone talking about a free software that has these 5 features. I know Vegas and Premiere have them, most likely (but these are complicated software packages that would take time to learn - last resort for me, for more than one reason.)
So, I ask, any free or cheap (sub $100) video editing software that's fairly simple to use/learn, that has the above features?

I've used VideoSpin, Lightworks and Movie Maker. MM doesn't do PiP stuff, and both VideoSpin and Lightworks cannot import the file format that Bandicam uses (AVI container, MPEG-1 VBR video codec, MPEG-1 L2 audio codec). So a program that can use those codecs would also be a great help.

Sorry if this is in the wrong section, but I do consider myself a newbie to all this.

[fvisagie]

Apparently Movie Maker does support custom effects like picture-in-picture via add-ons. Here are some links to get you started:

Blaine's Movie Maker Blog
Custom Transitions, Effects and Titles for Movie Maker 6.0

If you need to get hold of Movie Maker 6, which was not distributed separately by Microsoft, I've seen a number of downloads on the web.

If, on the other hand, you'd like to work with something like VideoSpin or Lightworks, consider repackaging the Bandicam output in a format they can understand. You could use something like Avidemux or MediaCoder, although there are a host of similar utilities in the forum's Tools section. Look for a target format that won't require re-encoding (to preserve quality) but hopefully will only need copying existing content into another container format, say MPEG-1 video and audio into MPEG container format (if that's compatible that is).

Cheers,
Francois