Basically, it lets you have an image (not anim.) layer on top of everything set to 50%, where you can draw arcs etc.
Any of the icons create the layer if it hasn't been created yet.
The first button with the paper icon, lets you toggle the Overlay-layer (it toggles layerdisplay+lock/groupcollapse).
The two brushes are very bright line brushes for notes and arcs and go straight to the overlay-layer.
It's a very simple tool, but very useful!

(edit the first two lines of the buttons if you want to change the name and colorgroup you want to use, right now it uses "Overlay ref" and colorgroup "1")