Yes, you can insert images along with videos. The images can be placed on any video track.The following Image formats are supported by Video Edit Magic
1.Bitmap (.bmp)
2.GIF (Graphics Interchange Format)
3.JPEG (Joint Photographic Experts Group)
4.TGA (Targa or Truevision Graphics Adapter)
5.Mode 2 (Uncompressed RGB) in 16-bit, 24-bit, or 32-bit.
Image files are treated like videos and you can resize, cut, copy, paste and crop them.
If you intend to overlay one image over the other then place the images on the two video tracks and add the Transparency or Picture-in-Picture transition depending on your requirement.