what you want to do is create a bitmap, then type this after one players stuff is moved:
copy bitmap 0,1
set current bitmap 0
get image 1,0,0,640,480 (might be 0,0,640,480,1; cant remember)
set current bitmap 0
sprite 1,0,240,1
scale sprite 1,100,50
copy bitmap 0,0,240,640,480,1,0,240,640,480
delete sprite 1
then move P2's stuff and do this:
copy bitmap 0,2
set current bitmap 0
get image 2,0,0,640,480 (might be 0,0,640,480,2; cant remember)
set current bitmap 0
sprite 2,0,240,2
scale sprite 2,100,50
copy bitmap 0,0,240,640,480,2,0,0,640,240
delete sprite 2
and finally:
copy bitmap 1,0
copy bitmap 2,0,0,640,240,0,0,0,640,240
sync
basically it turns out as what player 2 should see, only scaled down to half its height, on top of what player 1 should see, also scaled down. If you want P1 on top instead then switch the order of the two blocks of code. I made this from memory without DB running so dont be surprised if i overlooked something obvious