There was a major debate at the time on whether windows should be overlapping or non-overlapping.

I was in the latter camp!

I switched to a tiling window manager years ago and never looked back, but had the luxury of much larger high-resolution screens. Would be hard to imagine it working well at 640x480 pixels. Even overlapping windows weren't great on such small screens, most people just maximized whatever they were working on.

I've run Windows for almost 40 years and I almost never overlap any windows if I can avoid it. I have every window maximized that allows it. Some OCD thing :)