How to add picture over video to create a lower third look

Here's one I've not been able to deduce. After creating a small JPEG label, I want to place it on the lower portion of the video as a title, but one that has been custom made. In this case the logo needs to cover the lower right of the screen. Therefore, I need to bring this photo over into IPhoto, import it into the video, and be able to manipulate it to sit exactly where I want it to go. Picture in Picture doesn't work because that deals with two video elements. Crop doesn't work partially for the same reason but also because the crop box won't go that small or that wide.
This lower third logo needs to be able to stay over the entire length of the video (as in this case) or be able to fade in and fade out at certain times.
Not sure if IMovie has this capability, and would sure appreciate the tips. Thanks.

If you upgrade to iMovie 09, you could do this with the cutaway feature.
You would create the lower third title in Photoshop or the like. Make the slide in the same dimensions as your iMovie project and the same aspect ratio. Set the lower third title exactly where you would want it on the frame. Use PNG not JPEG so you can make the only thing showing your title. Everything else in the frame should be alpha-channel transparent.
Drag this over your video in iMovie 09 and select Cutaway.

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