Is this possible in VSDC Free Video Editor?

Found an old thread about VSDC where I asked about this but thought I would create a separate and new thread as well, does someone know if what is shown in this YouTube clip is possible in VSDC or any other freeware software/tool?

http://www.youtube.com/watch?v=I1VkY6v3Ll4

I found it to be possible in Sony Vegas but would be happy if I didn't have to spend all those money since it's only this effect I'm interested in at the moment.

Thanks in advance!