PiP2 2.0.1 for Mac was available to download from the developer's website when we last checked. We cannot confirm if there is a free download of this app available. We recommend checking the downloaded files with any free antivirus. The program is included in System Tools. This Mac app is an intellectual property of Pleasant Software.
From the developer:
Use PiP to show video from any webcam on your screen, nicely integrated as "Picture in Picture" which makes it ideal for live presentations, screencast recordings and in the educational sector.
PiP doesn't clutter the dock with an additional icon: After launch it automatically installs itself in the menubar and the user can define a keyboard shortcut to smoothly fade in and out the video.
You may want to check out more Mac applications, such as Missing Sync for Palm Pre, PSPWare or FourEyes3D, which might be related to PiP2.