omarwilson,

Can't answer with certainty as you have not said what Magix program you are using. With Movie Edit Pro and Video Pro X you can easily do this. 

Put the clip you want to overlay on a timeline track lower (higher number) than the clip that will be the background. Then use the a size and position effect on the overlay to reduce it and place it where you want. Depending on you program and version this will likely be available under the 'Effects' tab >> 'Video effects'. There may also be presets available to do the job by simply dragging the effect onto the timeline.

Most recent MEP program versions also provide for key-frame animation so you can have the overlay change its size and position (and rotation etc) for some very interesting effects.

Regards,

Carl