Overlockers sew and cut at the same time. They can be used for neatening seam allowances (use 3 threads and 1 needle) and for sewing stretch fabrics (use 4 threads and 2 needles).
More expensive models will use 5 threads, they make a 2 thread chain-stitch beside a narrow 3 thread overlocked edge. Look inside RTW, a lot of it has this.
Cover stitchers make what looks similar to a twin, or triple, needle on a regular machine on the front, but stretchier.
IMO an overlocker is a must if you sew clothing, a cover stitcher is a luxury.