Today Internet is a very popular and vastly growing application. It added support for various new services as compared to past 3 decades Internet. The services like mobility, real time support and much more requires continuous evolution in Internet techniques and infrastructure. As number of users increasing day by day, Internet suffers from various problems such as bottleneck, congestion, path and server failure etc. To overcome or minimize these problems Internet wants new schemes with little or no change in present routing infrastructure. Overlays are the best solution; which provides new functionalities and improves previous properties without making any change in routing standards and network infrastructure. Overlay is an additional virtual layer providing new functionalities to present routing infrastructure. Overlay network constructed on top of surviving network. Some present overlay networks are oTCP, RON, Detour, G-ISP designed to provide some functionalities. oTCP is an Overlay network, it increase TCP performance of connection by converting a TCP connection into multiple pipelined sub-connection. Each sub-connection follows end to end nature of TCP. RON is designed to provide fast fault recovery. RON is an application layer overlay network so it route packet according to application specific routing metrics. Instead of dedicated links Detour takes alternate paths to increase performance and availability. Detour routers form a virtual layer of functionality by tunneling packets over standard Internet. The inter-domain routing functionalities such as end to end inter-AS QoS, multicasting are offered by G-ISP to its customers , which today's Internet doesn't provide.