How can I add a GIF into this video clip?

What video editing software are you using?

I am looking for a software to do it, WMM, and 3 other programs I downloaded dont work. (pc)

Unfortunately your options are kind of limited with free PC software. You could start by converting the GIF into two static image files (assuming there are two frames in a blinking animation) or into an AVI file and somehow overlay the the file onto the video. However, as far as I know, there aren’t any free Windows programs to do that correctly.

Dang

Using ADOBE products:

1) Take the GIF into Photoshop, and create a layered photoshop file (one layer is red ON, the other OFF).

2) Bring your video into After Effects or Premiere.

3) Bring the photoshop file into that program as well and put it on a track above the main video.

4) Adjust the red dot to suit in terms of size and placement. You will also have to animate the turn on and off, either by alternating layers, or using an expression of some sort.

You could also do this in Final Cut Pro.

But no, none of this is straight forward. Adobe flash might have some easier to use tools,
and Final Cut has a plug in that does the “record light” trick just by adding the plugin, so you don’t really need to gif at all.

You might also be able to do it in iMovie, the free video application that comes in Apple’s Mac OS X computers. It allows you to add text and such.