Whether you're working with photos or videos (or both), you can create a lot of very interesting effects using overlay tracks in VideoStudio Pro X3. One of the things you can do is design a Picture in Picture, or PiP, effect which displays one video playing on the "full screen" while another plays as an insert. This is the same type of effect you see when watching a news program in which the commentator is shown sitting at a desk and recorded footage is shown in a "box" on the same screen.
The technique used to create this effect isn't just restricted to video clips. You can also use photos and other images to make a professional-looking slideshow with overlapping scenes on top of either a photo or video background.