Gene Insertion: Transcription in Eukaryotic Cells

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If one gene is inserted into the sequence of a second gene, will both genes by transcribed in the eukaryotic cell?
 
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Yes, most likely, the whole sequence would be transcribed... as long as the tail of the inserted gene was cut off so that the polymerase would continue to read through it.

Although the translation would probably result in a non functioning protein, and if it was inserted into and intronic region it would be cut out in splicing.
 
Yes, that is how fusion proteins are made (fluorescently tagged, for instance). Ofcourse it needs to be inserted in frame and there is always a chance that the fusion results in a non-functional protein.