The short version:
A device installed between a motor and its source of electrical power designed to monitor the incoming electrical current and shut off the power if it reaches levels which could damage the motor by overheating the stator windings. Not to be confused with a circuit breaker, which shuts off the power in case of short circuits (which generate much higher currents).
The long version:
Electric motors are expensive beasts, and care must be taken not to damage them. A 100 horsepower motor may seem like a hulking cast-iron behemoth from the outside, but the copper windings inside are thin and can be damaged by pushing too much electrical current through them. Not only would repair or replacement have the obvious immediate monetary costs, but in a factory a damaged motor could mean loss of production time. When a factory is not producing its goods, not only is it not earning money, but it is still suffering the fixed cost of operation (employee wages, heating, lighting, property tax, etc).
Two devices are used to help protect a motor's delicate windings in different ways: circuit breakers and overload blocks. Circuit breakers (or fuses) are used to provide short circuit protection; that is, protection against extremely high currents generated by voltage-carrying wires coming into contact with things they shouldn't. These are basic protection devices that should be found in every electrical system. Overload blocks provide protection against currents that are too low to trip the short circuit protection, but still high enough to damage the motor's windings.
Motor windings are not ideal conductors of electricity. This is to say that they have a small amount of resistance (measured in Ohms) to the flow of electrical current through them. The effect of this resistance manifests itself as heat generation — the more current there is flowing through the windings, the more energy is lost as it is converted to heat. This heat can damage the motor windings over time.
The function of the overload block is to monitor the wires supplying power to the motor for excess current which can generate this heat and damage the motor. Overloads are sized by the current at which they shut off the power, and this should match the full load amp rating on the motor's nameplate. This is the maximum current the motor is designed to safely handle. Unlike a circuit breaker, when an overload trips it does not directly cut off the power to the motor's windings. Instead, it opens a set of contacts connected to the control power circuit. This shuts off the power that is giving the motor's starter its run signal. To restart the motor, the overload must be reset, usually with a button that physically pushes the spring-loaded contact back into position.
There are three basic methods to monitor the line for potentially damaging levels of current. The newest models use solid-state electronics to monitor the current directly. The other two methods are based on detecting the heat generated by the current rather than the current itself. Since the heat generated is directly proportional to the current, this is a reliable method which has been in use for decades.
The first heat-based type uses a metal alloy with a known melting point. As current passes through a heater near the alloy, it heats up. Too much current in the heater will melt the alloy. However, unlike a fuse which permanently breaks the electrical connection and must be replaced, the liquefied metal in the overload is not even part of the electrical connection. Instead, a small ratchet gear is partially embedded in the metal alloy. The ratchet gear is used to hold down a pin (called a pawl) which is holding down the contacts connected to the motor's control power circuit. When the metal is solid, the ratchet gear cannot turn. When the metal melts, a spring in the contacts pushing against the pawl turns the ratchet gear, which allows the spring to move the contacts away from each other, breaking the connection in the control power circuit and shutting off the motor. When the metal solidifies, the overload can be reset by pushing the pawl back under the ratchet gear's teeth which closes the contacts again.
The second heat-based type uses a bimetallic strip. The electrical current for the motor passes through a heater again, but in this case the heater causes the bimetallic strip to bend as the two layered metals expand at different rates. When the strip bends far enough, it releases the latch on a spring which holds the control power circuit contacts closed, which snaps open the contacts and shuts off the control signal to the motor starter. When the bimetallic strip cools down, it returns to its original position and the overload can be reset by latching the spring on the contacts closed again.
In both cases, the overload can be set to a specific current rating by replacing the heater element. Higher current ratings are achieved by using heaters which require more current to reach the temperature necessary to melt the alloy or suffciently bend the bimetallic strip. In the case of solid-state overloads, the current rating is usually set with DIP switches that change settings in the electronics.
On an electrical schematic, a motor overload block looks like two shepherd's crooks pressed head to head, one curving up and one curving down. It is usually between the motor starter and the motor itself.