PIP is for videos that were taken from multiple VIRB cameras at the same time. You will receive a multi-cam prompt when you create a new video from a multi-cam clip or drag a multi-cam clip into an existing video open for editing. You'll see a multi-cam tab under edit, if you then select the multi-cam clip for editing.
Requires GMetrix for syncing, so you could try associating the same fit file from your VIRB video with your non-VIRB video. I can't remember if that will really work though. Explore the G-Metrix-->Data tab to do this.
If you want to just play with PIP, you can re-import a VIRB clip and then create a new video with one of them -- you should be prompted to multi-cam because of the duplicate clip.
