How is adding a photo overlay different from adding a photo to the placemark?

Isn't a photo overlay when the picture is sort of "draped" over the terrain so that it shows some of the elevation differences? It's sort of like putting your picture on a blanket and laying that blanket on the surface of the earth. We did that in one of the online assignments where we took a topo map and draped it over Yosemite... I think.