Right so I'm an avid Steam user and launch all my games through Steam so I can use the overlay. Only recently have I realised that the overlay dosn't work with Fallout. I'm assuming that this has something to do with the resolution (i'm not using the resolution patch). Does anyone know how to get the overlay working without using the resolution patch?
Cheers!

Nope, it will be an exclusive 'Steamed' fallout3.exe. When you launch it, it will automatically call for Steam... a bypass isn't possible.
I've never had any issues with mods and Steam versions of the games, there shouldn't be any problems with Fallout 3.

Sorry, but I fail to see the logic here. If you're going to pirate the game you wouldn't get it through Steam in the first place, which makes this irrelevant.

That's true, but it is technically possible.

yes, it's possible, but running a steam purchased game with the .exe instead of through the launcher doesn't mean you're pirating the game. you still paid for the software, and you aren't distributing free copies to anyone. your original comment (bolded) makes no sense.

I bought it this weekend on steam. I still prefer GOG.com and Gamersgate way, but I had no issues until now. My only grip is that the manual is not downloadable. At least I think it is not.

This one is downloadable
;)

Thank you! :)
(steam newbie here)

I don't think it isn't working because of the Resolution, as Source games (like HL2) can and will go down to 640x480(I think that's what Fallout is at) and the overlay still works.
I noticed that you have to add games to your Steam Games list, after that to get the overlay to work you must launch the game from your Steam Games list instead of any other shortcut.