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The overlay is a very broad concept. Background or overlay can be a plain image (typically the largest size in jpg format) on which are superimposed some elements, pictures or text, for example.

Seamless backgrounds or patterns that also pictures, but small, when overlaying them right next to each other, they merge into an integral image without visible seams. Most often they are used in the design of the web page.

The best collections of Photoshop overlays and Backgrounds

The image material or some kind of environment also can serve as a backdrop. For example, old paper, silk, denim, wood, concrete, stone, starry sky, sky with clouds, green grass, spray on the glass. Such overlays are usually called texture and are used widely in design.

Separate backgrounds form a base for children's art, bright, colorful pictures with lots of thematic elements.

Overlays create a mood, emphasize the dignity of photographs and decorative accessories. But they, in any case, should not obscure the main elements of the composition.

On MrOverlay.net you can download free or purchase a variety of photoshop overlays and backgrounds.