I have been working on an iPhone app, that will work similarly to FaceTime. I want to be able to take 2 videos and have one large and the other small like the FaceTime setup, but made into 1 video file for sending.
I know looking at the Video Editing code that you can merge files one after another, but I want to be able to play both videos simultaneously so that it will have the effect of two people talking to each other.
Any suggestions?
Try AVFoundation - it's the new library from Apple that lets you stitch-together multiple videos streams into a single video.
It's quite low-level, and there's no web tutorials out yet, but the WWDC video from 2010 has lots of detail on how to use it.
Requires OS 4 and a 3GS or better, though.