The overlay tool handles web projects which depend on other web projects. For example I have a web-project called my-web-core which has some standard web pages such as login and it’s own web.xml. My other web project called my-web-operations depends on that. It has it’s own web.xml and it’s own web pages. Maven will take my-web-core and then extract my-web-operations on top of it. The final output is a project that has all of my-web-operations and any of my-web-core that doesn’t exist in my-web-operations.
In order to develop this, I use a Custom Location and deploy both of these projects to the same location. This has the option to add/replace. This works unless a resource exists in both projects. In that scenario, MyEclipse is not consistent in how resources are copied over so I find my self having to use the Unix touch command to update the date on files that I want copied over. So if I want the web.xml from my-web-operations to be deployed instead of the web.xml from my-web-core, I have to run touch against the web.xml file so that MyEclipse thinks it has changed and copies the new file to my Tomcat deployed directory.