I generally try to avoid overlap, I don't like sharing a major resource (ie. pig tile). I don't really care about overlapping regular tiles. I'll sometimes build cities almost beside each other so I can capture all available coastal resources (fish, crab, clam). Sometimes having 2 cities working the same cottage can be efficient.
I'm a big believer that 1 good and 1 crappy city is better than 2 average cities. If there is overlap, I always pick the better city to get the extra working tiles rather than share them 50/50.