From wikipedia: "Overdrive is a device which was commonly used in automobiles to allow the choice of an extra-high overall gear ratio for high speed cruising, thus saving fuel, at the cost of less torque. Usually the final or top gear is called overdrive." Overdrive is just the highest gear on an automatic transmission. It's probably best used on the highway, but you can drive around town with it just fine. If you want more torque for in-town driving, you could try using a lower gear; however, most people simply drive around in overdrive. It will not harm your vehicle, as it still automatically shifts through the gears on it's own.
