After inserting the PIP, you should see it in the Viewer. You can drag inside the PIP to reposition it, or drag the corners to resize it.
Here is a good illustrated tutorial.
It appears that the reason it wasn't dragging was because the superimposed clip went all the way to the end of the main clip. If there's no room to drag the clip, it apparently won't move. BTW, thanks AppleMan1958 for such a quick reply.
Sorry, I misunderstood what you were trying to do.
The trick is to add some black space at the end so you have room to drag the clip. You can find some black clips (and some other colors) under the Maps button on the middle toolbar. Add this black background clip to the end of your project and make it long enough so you will have some room to drag the PIP clip.