No overlay??? In 2012? Really?
IMHO overlay is a very basic feature much more important than 3d support.
It's 2012. Overlays are pretty much obsolete - the chances are the feature you are thinking of is emulated on your graphics card using 3D support anyway. Let's see why:
Overlay: separate display region with independent colour format and resolution from main framebuffer, intended for the display of video streams.
+ No software YUV <-> RGB conversion necessary
+ No software scaling/filtering necessary
These were definite boons back in the 90's, but there are drawbacks too
- Generally only one overlay available on supported hardware
- Overlay typically occludes framebuffer and can't be part of any graphics pipeline or windowing architecture. It's basically "on top" or not at all.
- Limited video processing available, usually only colour properties can be adjusted.
The alternative to this is video texturing, where a YUV video stream is applied as a texture map to a rectangle primitive.
+ No software YUV <-> RGB conversion necessary
+ No software scaling/filtering necessary
So far just as good as an overlay, but there's more:
+ As many concurrent video streams as bus bandwidth / texel fillrate allows
+ Render target is a bitmap, can be used as part of any graphics pipeline or windowing architecture. Does not float above framebuffer and is compatible with both traditional and compositing windowing methods.
+ 2D/3D transformations possible
+ Shader postprocessing possible (on hardware that has them, which in 2012 is everything), virtually limitless potential for colour correction, sharpening, deblocking, deinterlacing, wacky artistic effects etc.
On my linux box, my nvidia card can handle many video streams at once, rendering them via this method and I can still do all the silly compiz zoom, 3D rotating box and other nonsense with no loss in speed while the video continues to render smoothly in each window.
It's not even a new idea. The Permedia2 doesn't have a dedicated overlay, instead supporting YUV textures. Due to the lack of fill rate (and on the Amiga, slow buses), you are pretty much restricted to one or two streams.
I really don't think you are missing much if you don't have a genuine overlay on anything like the HD4xxx series or above but you can leverage the 3D hardware instead.