iPhoto

I would like to know how i can put transparent picture on another pic that use as a background

I am sure it somewhere in the custom settings but i just cannot figure it out...

I want to create this kind of effect & I will be glad for help..

iPhoto does not support graphics compositing. The editing tools in iPhoto are for touching up and adjusting photos, but not for adding graphic layers, like Pixelmator or Photoshop support.

In a book you can place photo in front of a background photo, but you cannot make it transparent. The editing tools do not support transparency.