Overdrive is a transmission's highest gear setting and helps to reduce wear on the engine under normal driving conditions. The engine will turn over less for the same amount of distance traveled when in this gear.
Overdrive provides better gas mileage and puts the engine under less stress under most driving conditions. It is generally recommended to leave the car in overdrive at all times when driving except when going down a long and steep grade. The car might also continually shift between the lower gears when traveling between 35 to 45 miles per hour, which can be alleviated by shifting back to drive.