if you want to rip 'Meet the Spy' straight from youtube, I would recommend
http://www.youtubedownloaderhd.com/ and that will get you an mp4 file. As far as editing goes you can use Windows Movie maker, but its a little buggy and kind of messy. You can download 30 day trials of Premiere Pro or Vegas (I prefer Vegas), which will give you a non linear editing environment and better tools for graphic overlays. As far as trying to do photoshopesk stuff while in motion, you will probably have to use Adobe After affects (im pretty sure a trial is available for that too). I've never used After affects , so you are on your own with that one. If it is just one specific frame you want to use, usu. I will just screen cap and edit then just reimport it into the timeline in your video project. Most video players tend to use graphic card acceleration so when you try to press "prntscrn" it will just give you a large black box. However, Quicktime loads the entire video into memory , and you can set it as cpu limited, which will then allow you to screen capture and then edit in photoshop.
If you are trying to convert video files to different formats, I would suggest Super
http://www.erightsoft.com/SUPER.html (Note it is a real PAIN trying to find the download link) I've been using it to convert videos and audio for a couple years now.