Overlap cladding is the typical design of panels you see on a garden fence, where each thin horizontal panel overlaps the next, and the panels are nailed together. Because of the necessity for the panels to be laid over one another so they can be nailed in place, it makes each panel slanted. Tongue and groove, a more modern, premium variation on traditional cladding, joins the panels together by a tongue/lip on one slotting into a groove on the next, like LEGO. This means the panels remain vertical. It is a more expensive but more resilient option as it is more watertight, can withstand harsher winds and is usually made out of higher quality wood. You can find out more about the difference between various types of shed construction on this blog post from Garden Buildings Direct.