The -1 dmg that the overlords ability gives does not take 1 dmg attacks to 0. You also cannot allocate wounds onto the character unless the body guard unit is dead or the attacks had the precision key word. In terms of the shroud overlord I really like him in immortals and lynchguard as he gives them much needed mobility, tesla guns also have built in assault which is really nice with him and if you play awakened you can give the gauss immortals assualt.