What’s the difference between unlimited and overselling reseller hosting?

Unlimited: You can host as many domains as your resources (disk space monthly transfer) will allow. So if your hosting plan comes with 10GB disk space you can make 100 x 100MB hosting plans for your customers or 200 x 50MB hosting accounts.
Overselling: This Depends on the hosting account you choose. however if the hosting account you choose comes with 10GB disk space and you can create 100 accounts, then you can create 100 x 10GB accounts for you clients. You are governed by the combined total of actual space used by your clients and not the amount you allocate.