What is your idea of input? Like to use two external USB card to capture the video?
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That's good because these cameras have encoding h246 so you don't need to compress it ( if needed ).
I would say you can try to make the PIP with pygame or opencv
Ahah its fine. Try to find how to draw a feed of a camera into a canvas.
Like this one http://www.emoticode.net/python/how-to-use-pygame-to-grab-frames-from-you-webcam-and-display-the-video-stream-to-a-window.html
And I am pretty sure you need to use the newer version of rasp otherwise it won't have enough power to compute two wevcam.