Overlap is when 2 gears are applied at the same time. If the shift timing isn't correct 1st gear can still be applied for a while when 2nd is applied. Same goes for the 2-3 shift. Of course when it's in 2 gears at the same time something has to give thus accellerated wear happens and you lose performance. It doesn't necessarily do it with all generic shift kits but it can happen. The Trans-go kits totally reprogram your valve body by having you do several mods virtually making all transmissions perform as they designed. That's why I only use Trans-go kits.
BTW: Overlap is usually just a few tenths of a second but that's all it takes to lose performance and trash the clutches and or bands or possibly break other stuff if it's real bad.
