When the car reaches the speed that you would like to attain (say 55 MPH) and levels off (stays at 55 MPH) the engine does not require as much gas as when you are getting up to speed (0 - 54 MPH). So considering this, Overdrive is when you get up to speed and the amount of gas put into the chambers is reduced, (but you still continue at 55 MPH) saving tons of gas and is easier on your engine. The overdrive on/off switch controls the transmission. If overdrive is off (indicated by light on dash) vehicle will not shift into overdriven gear (4th gear); which can be useful for mountain driving. Overdrive should be on though as it will greatly effect your gas milage if it is off.
The button does not switch from Overdrive to Automatic. The button just turns the overdrive off. Overdrive is not a separate drive system as your question implies. Normally you leave the car in overdrive mode. That way the transmission shifts into overdrive at highway speeds, thus saving fuel. If you are saying the transmission is stuck in overdrive and it will not disengage then seek out a A/T professional.
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