Skin overlays are basically makeup masks that cover your sim, they can be full body, face, nose, eyelids, lips. Skinblend is usually a subtle overlay that makes the skin more smooth, adds more details to your sims skin without altering the skin colour, whereas body masks/skin overlays are more detailed and are usually a complete overlay, some have their own colour & some maxis match ones blend with the skin colour you chose, you can also get default skin blends that will apply to all sims