I took an autobody class at the local community college last winter, the guy there said they always overlap, I think it is a matter of time more than anything else. He said thye don't flange it, as the metal is not that thick and it is not that hard to blend it out with filler.
I am have been doing a lot of rust repair on my car as well, and have done both kinds of welds, the biggest difference for me anyway is that to do a butt weld you need to cut the patch darn near perfect, the actual welding of a butt weld with a MIG was relatively easy for me at least.
The other concern with the butt weld is that it may be more likely to warp than the thicker two layer bond created by the overlap.
Of course if done well it looks better top and bottom, really thought it was pretty cool when I butt welded a couple parts and then grinded them out and it was like the rust was never there.
Important thing with the overlaps is to seal them--paintable seem sealer on the bottom is good, on the top they make fiberglass reinforced filler which is both stronger and doesn't absorb water.
Lastly, there is a relatively new body metal, they say if done right it is stronger than a weld, you need to over lap to apply it, but the neat thing is that it acts as both the bond and a very strong tight permanent seal on the joint. I haven't tried it but have seen it used--apparently not cheap, but your local auto body place should have it.
Greg