How to Create a picture-in-picture effect in Pinnacle Studio

First add video to the video section. Then take what we want to add and place it just below the video in the video section. Now look at the bar just over the video section. There will be a video camera sign. Click on it. There will be many tabs. Click on the "overlay feature tab" then click on the "Enable picture in picture" option. Now choose "Full Screen" in the drop down menu in the preset options. Now set the Video Transparency option to whatever you want.

Now it's all done. Check your work by playing the video on the right side.