Question #1: Just use
load image to get the picture in, then use
sprite to set the image to a 2d sprite (or "overlay" as you call it).
Question #2:
Set camera view is your friend.
Just set the camera to the rectangle you want and fill the rest with the menu, and you'll have a menu bar with no blind-spots. Personally I'd just make the menu transparent (
set sprite alpha) and leave the view alone (for composition reasons), but that's just me.
Hope I helped! ~Underhill
EDIT: Didn't see Bolt's post before me. 3d sprites sound like a good idea for speed and compatibility reasons. You might want to try them, too.
"You don't need a reason to help people."-Zidane (FFIX)
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