"When asked about the potential catalog non-overlap (what happens when a book available via Overdrive isn’t available on Amazon), the answer from Overdrive was that they hadn’t looked fully at the catalog overlap yet. But it sounds like the Kindle compatibility is simply going to be there for your existing books as an additional option…well done!"
OverDrive isn't sure what's in their catalog as an ePub or .pdf or whatever vs. what publishers are willing to offer as a kindle ebook for lending purposes. The blogger is asking, what happens if there's an ePub or .pdf but not an .azw? I suppose that's interesting if it's a non-empty set, but I sort of suspect it's an empty set.
An alternative, probably NOT empty set: what about books that publishers have made available as a .azw but not in any other format. Will there be books you can get from overdrive only for kindle?
I think the blogger is a little confused about how the delivery of content will work, but we won't know until it rolls out, probably. Obviously, the number-of-copies thing is going to get thrashed out the hard way (on a per publisher, possibly a per title basis, and it will likely drive users absolutely nuts whenever they checkout a book that is only allowed on a single device at a time per checkout).
But really a quite good discussion of some of the issues.
ETA: Wondering about the number of titles out there?
A _really_ interesting discussion. I went looking for something that would tell me how much of what was out where after I saw a CNN blog post saying OverDrive was offering over 400K titles.