I can try to explain overdive and hopefully if I'm too far off the mark someone will correct me. Although I think I have a fair understanding of it. Basically it is the gear ratio. In first gear, there is a bigger ratio between the gears. As you shift up, the gear ratio gets smaller. With the bigger ratio in the gears, it is easier to get the car moving from a stop. Once a car is moving and has enough forward momentum, it can shift into a gear (overdrive) that has a much closer ratio but doesn't provide as much power.
Racing in Overdrive is a total loss. I know, I ran against Rizall and forgot to take my overdrive off one time, big difference...

-JoeB