At the basic level clips are added side-by-side on the same track. When played, the result is a cut between them, or transitions can be programmed.
Higher numbered tracks take precedence over lower, so if video is added to track 2 it will cover track one. Reduce the size of the track 2 video, using an effect like SCALE or POSITION, and track 1 will be seen behind track 2. Picture-in-picture.
Splitting can be accomplished in a number of ways. If the clip is in the top-left BIN, drag the red-lined cursor in the preview window to the start point and click SET START. Then drag to the end point and click SET END. Position the sequence timeline cursor where you want the clip to go and click the ADD button.
Or, if the clip is already on the sequence, set the cursor to where you want to begin the clip and click SPLIT. Do the same for where it's to end. Then delete the unwanted parts. Clips can be dragged, so that they butt up against one another. Another way to remove gaps between clips is to right-click | CLOSE GAP.
Check out the VP tutorials.