[MK]

Honestly, I've never heard of anyone using both products together but yes, the Skin should be used on top of the Overlay. It's actually technically better for the Overlay to be on the outer surface as the Overlays are extra scratch resistant thanks to the hard silicon coating, but the slight indent between the skin and the screen may result in trapped air-bubbles, which is why the overlay should be at the bottom if you're using both together.

Removing the Skin will not damage the iPod - likewise, it will not damage the Overlay either. If you place the skin below the overlay, there is a possibility that the skin might get damaged when you remove the overlay. Either way, your iPod is never damaged.

If you've not applied your Overlay, I will suggest that you keep this for future use and apply only the Skin and a screen protector as that will be sufficient. Do apply the screen protector before applying the skin. If you do not wish to purchase any screen protectors, then apply the overlay before applying the skin as it will result in the same screen protection result.