iMovie 'picture in picture' image size question

I'm having trouble inserting a logo into an iMovie. I used Pixelmator to create a transparent logo, inserted it into my iMovie project and selected 'picture in picture' mode but I can't seem to make it fit in between the green and red boxes in the ken burns setting. It's too big. I've tried resizing the image in preview but nothing is working. Can I resize it once it's in the project? This is wrecking my head.

Here's a screenshot of what I'm talking about:

http://s1201.beta.photobucket.com/u...enShot2013-01-18at145844_zpsbadb4765.png.html

I need the logo to be transparent as I don't want any border around the logo taking up screen real estate. Will it work if I do it that way?

Also on a side note, I upgraded my 2009 iMac yesterday to Mountain Lion before I bought iMovie. It's 2.4ghz with 2GB of ram.

iMovie has been working perfectly all day but now all of a sudden it keeps shutting down. I can't play any clips let alone finalize or export a project. I know my Mac is pretty old but everything was fine a few hours ago. I've tried quitting every application and shutting down the computer but nothing is working. What would make this happen all of a sudden? If it's a ram problem surely this would have happened as soon as I updated the OSX and bought iMovie yesterday?

Any suggestions?

Cheers for that. I followed the steps but I keep getting a black border around the logo. Although right now my iMovie isn't working at all anyway

Ok iMovie is killing me here. Keeps quitting!!! From googling, I'm not the only one it seems. Can anyone help?