Attached xrefs will nest. Overlays won't. Let's say I have a drawing with a few attached xrefs. If I xattach that drawing on a sheet, the attached xrefs will come along for the ride. Overlays are only applicable for the immediate target drawing and can be used to xref elevation drawings into plan drawings and vice versa without risking circular references.
Architect, Registered NC, VA, SC, & GA.
