Be sure to watch the video above so you know what we are trying to accomplish in this tutorial. To recreate the effect above you need to have first recorded your background video (in my case, a Keynote presentation).
Add Overlay Video
Expand Your Timeline
Drag 2nd Video Onto Preview Area
Your Timeline Should Look Something Like This
Crop and Resize 2nd Clip
Cropping is a little trickier. You need to click on the handles while holding the ctl key to crop the edges.
Reposition and Resize
Add Rotation and Reflection
We could leave the overlay video as is, but adding a little rotation and reflection can add a cool effect. Adjust the Y rotation (in this case -37). Then check the Reflection box.