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Chris,
Overdrive is a fancy word for 'one more gear for ya'. On a the manual transmissions, this is a little button on top of the shifter. Once in forth gear and revving at about 3000 rpm (or whatever makes sense for your driving habits), I would certainly go ahead and engage the overdrive [push the button - no clutch needed - but check your owners manual]. This will cause the car to shift into a secret gear, ultimately enabling you to reach the critical 88 MPH needed for time travel! (okay - got carried away)
On the automatic transmissions, the overdrive button is on the side of the shifter. It works a little different here since the whole idea of an automatic trasmission is to not do anything at all. In general, the overdrive is always 'active' when the car starts. This means that you will have 4 speeds available to you. If you push the button, the overdrive is deactivated. This will effectively disable the 'top' gear. What this means is you will downshift if you were already in top gear [overdrive], or never up-shift to top gear if you were below it.
My opinion is that you would generally leave OD active unless you explicitly want to prevent upshifting - perhaps in 'around town' driving conditions. The most oft-encountered situation to 'de-activate' or 'disengage' the OD is when you are going down hill and want to down-shift in order to use the engine drag to keep you at a slower speed.
Hope my disertation helps and is proved accurate
Caleb
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⏣ 740 GLE, 85 BMW K100]
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