Thanks for the video link. That was very helpful. Just to get on the same page in terminology, yes those were cross-fade transitions, but they were also what iMovie calls Cutaways, where you shift from one camera to another while keeping the audio going.
iMovie 09 and iMovie 11 both have an easy way to do Cutaways. First you go to iMovie/Preferences and make sure the Advanced Tools are enabled. Then, you drag the second clip onto the fist clip, and a popup menu will appear. Choose Cutaway.
A lot of Cutaways are what are called "B-Roll", where someone may be talking for a long time, and you may want to cutaway to video or stills that illustrate what he or she is talking about. In this case, the Cutaway function works great.
However, in your Cutaway, you really want the Cutaway to line up exactly with your Audio track. This takes a little more work.
You mention iMovie 08. Here is how to do Cutaway in iMovie 08. It is a little complcated but it works. It will be difficult to line up the audio exactly, but can be done with trial and error.
If you have iMovie 09, you get the Cutaway function that I mentioned earlier. Here is a good Tutorial.
If you have iMovie 11, you also get the Audio WaveForms function that makes it much easier to line up the Audio. Here is a post where I discussed in detail how to do this.
The basic problem here is that we are taking a consumer tool and trying to simulate a Professional function. If you get Final Cut Pro, this all becomes pretty easy.
Your last question about 2 clips in the same shot can only be done in iMovie 09 or iMovie 11 through several built in effects, including Side By Side, Picture In Picture, Etc. You don't get a lot of other choices. Once again, you get more flexibility with Final Cut Pro.