The "O/D Off" button disables your transmission's highest gear. Usually you'd want to do this when you notice the transmission shifting too often between O/D and the next lower gear.
Overdrive is a more economical gear ratio. Although torque is lower, the fuel economy is a lot better than your next best ratio. On hilly terrain, I would recommend disabling overdrive to prevent over shifting. This increases transmission temperatures, breaks down the additives in the transmission quicker, and can cause premature damage, rough shifting, etc. For most people, overdrive should be enabled.
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