Overlay (nunome) was a technique that was only applied to an iron or steal base. It was used a lot for decorating armour and for sword mounts. An inlay would be carved into the iron afterwhich soft metals such as gold, silver or pure copper would be laid over top in the form of wire or foil.
Inlay (hon zogan) involved cutting a depression into the base the exact size and shape of the peice to be inlaid. The fitted metal would then be inserted in.
Note the use of the decoration techniques on these sword guards.