The gears (automatic) on my new car have P-R-N-overdrive-D-2-1. When am I supposed to use overdrive? Thanks

Just use the Overdrive like you would the Drive gear. For all normal driving, that will give you the best mileage and be easier on the engine. The only time you'd use Drive in place of Overdrive is if you're towing a heavy load where higher RPMs are necessary.