Yes you can launch another application (assuming you have the correct permissions in your AndroidManifest.xml). All you have to do is create the intent with the relevant Action (you can scroll down and see different type of Actions). And if needed, set the relevant "data" and then start an activity using that intent - android will know which application to launch based on the action.
An example that launches a phone dialer:
Intent intent = new Intent(Intent.ACTION_DIAL);
intent.setData(Uri.parse("tel:4087775555"));
startActivity(intent);
When you start a new Activity (launch another application) your applications moves to the background, so the answer to that second question is that no, you cannot "embed" another application in your application.