Open the picture you want in the background (the ostie, for example) in the GIMP. Then, click on the "add layer" button in the Layers dialog box; rename this layer "decal layer." This will be a blank layer at this time. Next, open the picture you want to paste on the Ostie (call it the "decal") with GIMP, then select the part of the decal you want to paste on the Ostie using a square or round selection box. Copy the selection, then move over to the ostie picture, select the "decal layer" layer, and right click in this layer. Select "paste." You should now see the decal picture partially or completely covering the Ostie layer. Use the eraser tool and the fuzzy select tool to remove any parts of the "decal" you don't want, then select the remaining part of the decal layer. Use the scaling tool to shrink or grow the decal to the desired size, then the move tool (the one with four errors pointing up/down/left/right on it) to position the decal over the spot on the ostie where you want the decal. Save this as a *.xcf file, so you can go back and edit it if necessary.
Next, right click on the picture, click on "Layers", click on "flatten". This will make the two layers into a single layer. Finally, click "file", then "save as" and save it in whatever format you desire (png, jpg, bmp, etc). Hope that's what you were looking for.
