Drupal overlay is not working for content links
First of all, make sure that the user that is trying to use the overlay has the appropriate permissions to do so (the permission is called: "Access the administrative overlay"). If you are trying to add/edit content as admin, then that's not the problem.

Also, make sure that in admin/appearance page, the option "Use the administration theme when editing or creating content" is selected. Notice, that if a role does not have the permissions to use the administrative theme (or the overlay for that matter), the users with the specific role will be adding/editing content through the default theme of your site.