I know how to place an image onto a clip but how do I make the image smaller ie; to sit at the bottom right hand corner of the clip. The image is a psd not jpg.
If you are in Time-Line mode, you left click the image to highlight it. You then go to the Media Pool and click on Effects, look for Movement Effects and pick Size/Position.
In the Preview Monitor, you should see on the image orange handles on each of the four the corners. You can use the mouse now to grab a handle and resize the image. Clicking in the center of the image allows you to position it.