Hi Steph
With no clip added to the timeline there is no label relating to the overlay track. The overlay tracks are Video Track 2 and up.
As soon as you add a clip to the main sequence track...Video Track 1 you will see a prompt appear regarding the adding of overlays.as shown here... (It doesn't appear earlier as there is no clip to overlay until you add one.) 

Once you drop a subsequent clip to the area indicated it becomes Video Track 2 (as shown below) and overlays (plays over) anything on Video Track 1 and consequently hides it. If, however you make this clip smaller as Borate mentions then some of the underlying clip on Video Track 1 will be visible and both will play together. They must, of course be vertically aligned on the tracks.
Note that above video Track 2 the prompt reappears in the grey area again... and you can continue to add further overlays. (Video Track 3 etc.)

As well as allowing several clips to play together in the same frame, the overlay tracks can also be used to edit the clips on lower tracks without having to chop the soundtrack about. i.e. you can use the overlay track to insert Cut-aways. etc. Note these images were produced from Version 3.85 (latest) but 3.79 is no different in this respect.
Nat