How to create One icon over another icon dynamically ?

I don't think that's possible, "dynamically".

If you had Launcher Pro Plus, you could change the homescreen grid to 10x10 so that you can "manually" do this...

 

There was some app out there that allowed you to place more icons in a single 1x1 space.....I forgot its name though.

 

that's Multicon

 

You could do it in a photoshop and then use LP or desktopvisualizer