Overnight backups are automatically created for databases that happen to be open at 3:00am local time. This includes open workstation, server and application databases. An overnight backup is made for each open database, independent of what other backups exist for the database.
An overnight backup is created in the same folder as the database being backed up and has the same file name, but it's extension is *.nv2_backup_overnight. There is only one overnight backup per database. The previous overnight backup is replaced but only if the backup operation is completely successful.
Some users keep NewViews open "all the time", rarely closing application databases, whether they are local or remote. If you rarely close a database then a logout backup (as described below) is rarely created. The overnight backup takes up the slack in this case, ensuring that whether local or remote, and even if you rarely close a database, you will still have a backup copy of the database that is less than a day old.
Note that you can and should still make backups using the database backup command and these backups should be taken off site. The overnight and logout backups make a copy of the database on the same disk as at the database itself, and therefore will not save the database from catastrophic failure. The overnight and logout backups will reduce the amount of lost data for most types of failures but they do not provide an adequate general backup regimen by themselves.