Click Add Files and select two files: one for the background and the other to overlay on top.

Before you dive into video editing, create an extra video track. Just click the Plus button and select Add video track. Drag one of the videos onto this new track and the other onto the main track. From the menu, choose the Picture in picture option. You can adjust the size by dragging the edges of the video. To place it where you want on the background video, just click and hold to drag it to the right spot.

Click Export. In the popup window, select the settings you want and click Start.