I think overselling can either mean, selling one client too many features of at too high a price point (ie selling a 61 inch wide screen Plasma to a guy looking for a 27inch tv) or it could mean overselling your own capabilities to the extent that you can't keep up with demand (ie the line up for ice cream is around the block with only one person scooping it out - customers leave frustrated never to return).
In either case i think it really depends on the intention of the selling vendor - if he/she has the support and service to back up the increased sales then it can be a good thing as it can relate to an economies of scale and a price reduction for all existing and new customers. If its in a situation where you are overselling features than you better be ready to replace that customer or handle the cancellation as there post-purchase satisfaction could be very high
