Yes, 1 rotation on the input and 1.25 on the output would be an overdrive.
If you turned the input 1 rotation and the output turned .75 that would be an underdrive.
Let's think about a 5 speed transmission in the trucks.....
First is 4.14:1 so the input turns 4.14 times the output turns.... this is why you only go 10-15 while on the governor...
Second is 2.37:1...... 2.37 in 1 out
Third is 1.42:1...... 1.42 in 1 out
Fourth is 1:1...... 1 in and 1 out. In this case, if you think in RPM, if the engine is turning 2000 RPM the output of the transmission (driveshaft) is turning 2000 RPM. In all gears lower than this, the engine RPM will be higher than the driveshaft RPM (the same as an underdrive would be)
Fifth is .77:1.... 1 revolution of the input, you would get 1.27ish revolutions out. Now engine RPM is lower than driveshaft RPM. This is what defines overdrive.
So if you don't have an overdrive transmission, like a C-6 it T-19, which the highest gear is 1:1, you can see how an external overdrive factors in.
Now, lets take a look at what happens if you have an E4OD or ZF-5 transmission AND an external overdrive. When the external overdrive is "off" (direct), your ratios work just like listed above.
But, if the overdrive is "on" (overdrive), let's see what happens. Now, in overdrive on the transmission (5th on a ZF-5 or 4th on an E4OD) when the input turns 1 time, the output turns the same 1.27ish as before, but this is now the INPUT to the external overdrive. Now, like you see with your overdrive 1 turn of the input gives you 1.25ish out. However, that 1 input turn on the external overdrive is already an overdrive... so now with both in overdrive for every 1 turn of the transmission input shaft, you are now getting 1.5ish turns of the driveshaft. This is "double overdrive" which is how Gary (icanfixall) got his picture of 85MPH at 1500 RPM.
Also, looking at this, you can see how you can "split" gears with the external overdrive. For example "3rd over" (transmission in 3rd, external overdrive "on") would be a higher ratio than 3rd, but not as high as 4th..... sometimes this is just the sweet spot you need.
All this is just driveshaft RPM, has nothing to do with the ratio in the differential(s)...... The combination of the two determined wheel speed.
Sorry for the long winded post, but when I first started looking into stuff like this it took a while for me to wrap my head around it. So hopefully my one time struggle will help someone else understand a bit easier.