A skin overlay is a popup unit that overlays within the website page the user is viewing. This overlay is launched by a user clicking on an ad unit, which could be a skin, banner, or MPU unit.
They can vary in size and usually only allowed to appear for 15-30 seconds before they automatically close (unless a user interacts with them). They can be anything, from characters from a movie bursting out of the screen and cracking the site itself to a video or image.
Overlays are some of the most effective ad units.