Overlay is obsolete.
This very much depends on the platform in question. While traditional overlay and 3D texturing are pretty much interchangeable from the user's POV, overlay is much more efficient.
Overlay: raw video data is written once (decompression by CPU) and then read back once during display when the overlay is used in the framebuffer.
Texturing video: raw video data is written during decompression (CPU), then read back, scaled/converted and written to the framebuffer (GPU) and finally read during display (GPU).
Obviously the latter is more work, so if power or GPU bandwidth is an issue you're better off with overlay. On a desktop computer where neither is a problem it may not be worth the trouble.
(It may be possible to read the raw video just once, process it in the GPU and shove the data directly into the display pipeline, but I don't think they're using this approach.)