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A sump is a tank that sits under the display tank. You use it to add volume to the system and also hide equipment (heaters, skimmer, etc). Overall it's good for the system.

You need to have a drilled tank or one with a hang on the back overflow. The water drains into the lower tank through hose or PVC, and a return pump in the sump sends water back up to the display tank through hose or PVC.
 
Is it a HOB overflow or a HOB filter?

Two diffrent things. But basically, there's an outlet from the box that you connect a hose or PVC to and route that down to the sump.
 
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