It would be great if there was a free green screen program out there, but I don't know of any. Macs have this built in (poor quality), and the cheapest PC version I know of is Magix Edit Pro. It also happens to be the poorest quality.
Both Pinnacle, Corel, and Magix allow you to use a digital photograph in the way you describe. I would recommend downloading Pinnacle online as a free trial. This will allow you to try it out and accomplish your project in the process for free.
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