This takes layered video, which as far as I know is not possible in iMovie withough third party plugins. But if you search google for 3rd party plugins, Imovie, and layered video, then you'll come across several solutions I'm sure.
Next easiest thing to try would be moving up to Final Cut Express and give that a shot. It's a little harder to learn initially, but truly not too complicated for what you are wanting to do.
Brian