How to insert video as window/frame in another and keeping both audios?

[dvdboy2]

Need to put one video as a smaller frame within another - say one one corner of video #1 and retain both audios. Would like to be able to adjust level of audio in video #1 so that a little less than in video #2.

To add a complication, there are some things in video #1 (like treetops) I would want to overlay over the appropriate areas of video #2 that has been inserted.

How do I do this? What software would you use to do so?

Am newbie at video editing, but have long experience in computers/software in general.

Any help appreciated.

[raffriff42]

Get a decent (but still inexpensive) video editor like Vegas Movie Studio or Premiere Elements and in less than an hour you will solve the first question (called picture-in-picture) and the second one (called audio mixing), and ready to study the third, slightly harder problem (called making a matte). Half the battle is knowing the search terms!