You can do something like this:
public void putOverlay(Bitmap bitmap, Bitmap overlay) {
Canvas canvas = new Canvas(bitmap);
Paint paint = new Paint(Paint.FILTER_BITMAP_FLAG);
canvas.drawBitmap(overlay, 0, 0, paint);
}
The idea is very simple: Once you associate a bitmap with a canvas, you can call any of the canvas' methods to draw over the bitmap.
This will work for bitmaps that have transparency. A bitmap will have transparency, if it has an alpha channel. Look at Bitmap.Config. You'd probably want to use ARGB_8888.
Important: Look at this Android sample for the different ways you can perform drawing. It will help you a lot.
Performance wise (memory-wise, to be exact), Bitmaps are the best objects to use, since they simply wrap a native bitmap. An ImageView is a subclass of View, and a BitmapDrawable holds a Bitmap inside, but it holds many other things as well. But this is an over-simplification. You can suggest a performance-specific scenario for a precise answer.