This is not an overlay in the normal portage sense. Nor is it a complete stage4.
This is a tarball that is unpacked over a stage3, and with the included scripts can setup gentoo in under 5 hours.
Clean tarballs that try to match the latest branches. To create your own, see git-archive(1):
Partition and format your drives
# sgdisk -o -a 2 -n 1:34:2047 -t 1:ef02 -c 1:bios-boot -a 2048 \
-n 2:2048:64M -t 2:8300 -c 2:boot \
-n 3:64M:512M -t 3:8200 -c 3:swap \
-N 4 -t 4:8300 -c 4:root \
# mke2fs -Tsmall /dev/sda2
# mkswap /dev/sda3; swapon /dev/sda3
# mkfs.btrfs /dev/sda4
# mount /dev/sda4 /mnt/gentoo
Download a stage3 tarball
# /mnt/gentoo/recovery unpack
Run the recovery script (you must do this every time you boot into your installation environment)
# /mnt/gentoo/recovery prepare
Setup a portage tree
# /mnt/gentoo/recovery sync
Run the setup script under chroot
# /mnt/gentoo/recovery setup
Hostnames are special and should be unique. Give it one with a domain name. The script uses this to setup the hostname, hosts file and the outward mail. For your mail, this assumes that your second level domain can send mail from this host unauthenticated. A setup, similar to holly's, will work fine (as it's what I use).
The boot partition has to be handled in a special way because grub2 needs it mounted inside the chroot and genkernel mounts /boot while it works.
Finally, it asks you to set your root password. This is purely a practical matter.