Operator overloading allows the same operator to behave differently depending on the operands. It allows performing different operations on the same operands, making code more readable and allowing easy access to objects to perform operations. An example demonstrates overloading the decrement operator (--) in a class to decrement an integer count and displaying the result. Function overloading uses a single function name to perform different tasks based on parameters. An example overloads the area function to calculate the area of a circle, square, and rectangle depending on parameters passed.