Looking at the documentation, I was under the impression that all it could do was basic cutting and simple things like cropping. Can it do simple effects, like video overlays?
Yea, there are lots of effects and tools hidden in there! I've been able to implement every effect I've ever needed without much effort. I actually have been using blender since I was a kid so I know my way around better than most. I'll edit this comment later with some quick tips or examples.
Sorry for the shortness of this, but I know everybody strapped for time and might find this handy.
Things Blender capable of for video:
* Advanced graphical node based compositing
* "Effects Strips": Essentially generates a strip in the sequence editor that you can layer above the target media strip. Like using a Photoshop layer for one specific effect.
* Decent audio mixing capabilities
* Fantastic motion tracking (advantage of being built into your creation suite)
Pro Tip: Make sure your output frame rate is the same as the videos you are going to import. Otherwise the audio gets out of sync.