Overlay Window

Is there an easy way to create and overlay window to open on the click of a link?

Could you rephrase your question?  You can open a window by using onclick but I am not sure what you mean by overlay?  If you mean like the pop-up form for login, then yes, you can use the built-in Dolphin function; the name of the function eludes me at the moment.

 As I understand, topicstarter asks about build in onclick function.

I'm also interested how use it properly.

It's not like a traditional pop up window. It is more like the 'log in' pop up. The window opens and the side in the background turns grey. I've only every seen it described as an overlay window.

The pop-up login form is an html document and there is a javascript function in /inc/js/functions.js that handles it as a pop-up.  You can use the same function but pass it a different html document.  I think there may also be an anyHTML function where you can pass any html document instead of hard coding it into the function.  Maybe some of the other long time Dolphin users can shed more light on this.