Tested again successfully.
Add the background and insert images to the timeline, with the insert on a higher track.
Apply the border effect to the insert image track ONLY. Then apply SCALE and POSITION effects to that track as desired.
Use the current version. For licensed users upgrades are free for up to six months from purchase date. After that, VP will continue to fully function but a fee will be required in order to register the newest. Retain your old install file and registration info.