Overlay is a fancy word for sticker.
If the playfiels has an overlay this means it either has stickers on areas that were worn on the original art, if it has a full overlay it is one big sticker over the whole playfield.

+ 1

Horrible replacement for a worn playfield. Usually have the wrong colors, light only barely shines through inserts and the wear out just like any other sticker. These days, it is a lot easier to find someone to restore the artwork, and preserve the original character. I've played a KISS and Playboy with overlays, and they play slow.