Hola experts!

Here is my question and dire requirement
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My requirement is to cut some objects (face, hands, body) of an existing video and then paste the new version of it. For example, let's say there is a video, video1 about 2 mins long. I imported that video into the vegas editor and in the time line I expanded that 2 minute video in to frames/sec (so that became like a 120 frame video). Next I have another video, video2 similar to video 1 but with different cast in it. Now I want to cut a person from video1 and have his image replaced with another guy from video2.

I have gotten the Sony Vegas 8 (the latest ver) and I dont know where to find a way to cut an image (selected image) like face/complete body of a person from the video frame. I have looked under compositing and all it says is about how to "MIX" two seperate videos.
This is my requirement. How would I do that? If this is not possible in Vegas 8, please tell me which software does this. I would greatly greatly greatly appreciate if you keep in mind about my ignorance in video editing and provide solutions accordingly;