Video overlay enables the display of full-motion video on monitor screen without the constraints of the video BUS speed. The overlay can be either digital (eg. an .avi file or DVD-Video) or analog (eg. real-time NTSC or PAL video from a video capture board). The analog signal is first decoded to a digital format by the capture board, stored into a frame buffer, and then fed directly to the graphics processor's RAMDAC.
When using video overlay the CPU does not have to process any of the video information saving valuable processing power for actual applications.