Ah, I think I see what you’re doing.
Is there any alpha on the images? Also, what should happen to the parts of the larger image that don’t intersect your smaller image? Are those unaffected?
I think you’d use two rects, whichever way you ended up doing this. (In which case, maybe you can get away with just slapping multiply blend mode on the smaller image?)
If there won’t be any alpha in the composited image, one of the rects can just be the larger image in back, since it won’t need to worry about interactions with the result. Otherwise, you’d need some sort of cutout, so the larger image doesn’t contribute twice. Maybe a blend mode can give you this; otherwise, it’s a simple shader or mask.
For the second, smaller rect, I think a two-pass shader would do. The first pass would capture the part of the first texture that intersects the second, then feed that to the second pass, which is just the multiply effect.
Let me know on the first few questions. If I’m aiming in the right direction, it sounds simple enough that I might be able to throw some shader code your way later. (Going to be lazy for a while, though. :)) Any sample images / mockups would be appreciated.