INS indicates Insert Mode: typing a character inserts it at caret position.

OVR indicates Overwrite Mode: typing a character replaces the character found at caret position by the typed character. If the caret is positioned at the very end of a text (or comment or processing-instruction) node, then typed characters are simply inserted there.

Pressing the INS/OVR button allows to switch from Insert Mode to Overwrite Mode and vice versa. The shortcut associated to this button is by default Esc Insert (press Esc, release Esc, then press Insert).