if you want to insert a Picture-in-Picture you just need to drag two clips into the timeline. Place clip A (that you want to be displayed full-screen) on a track and clip B on the track underneath. Select clip B and choose the fitting Picture-in-Picture effect from the menu "Design Elements" -> "Picture in Picture" - you'll find this in the "Effects" tab. Drag the effect on clip B. Clip B is now placed on the desired position on clip A.
Best wishes and kind regards,
your MAGIX Videoteam