Insert the first picture. Then right click the picture, select Format picture, in the Wrapping tab, select None or Through. Then you should be able to insert a second picture and position it over the first.
An alternative method is to insert one picture in the background. Click View, Header and Footer. Open the drawing toolbar and insert a text box where you want the first picture. Click inside the box, then insert the picture there. You may need to delete the frame around the picture. When done, just click Close on the Header/Footer toolbar. The advantage of this method is that the underlying picture won't get moved around by any other picture or text.