Cue the timeline to the frame you want to freeze and click on the little
floppy disk icon just above the preview window. This will save the frame
as a still image on your drive (and if you have VF 2, it will add it to the
media pool). This function basically does a PrintScreen to capture the
image, so if you want a full size still, right-mouse-button click on the
preview window first and check "Display at Project Size, then rearrange
the workspace to show the entire preview window. Then click on the floppy
disk icon.

Now split the video event at the cursor position, slide the right part of the
event over to make some room, and drop the still onto the timeline. You
can stretch or shrink the still to any duration you wish. The default is 5
seconds.