Hey does anyone know what overdrive does and wether you should drive with it on or off.

Leave the overdrive on for normal driving where it is not stop-and-go traffic. If you are continually speeding up and slowing down to stop and you have the OD on, you will be just giving your transmission one more gear to cycle through every time you stop and speed up. Probably easier on the transmission to leave it off. I engage mine when I forsee driving over 40 mph.