CellAutoOverwrite is an option for Cell which specifies whether new output obtained by evaluating this cell should overwrite old output.
Any sequence of cells with GeneratedCell->True which follow the given cell are assumed to correspond to output.
The output is deleted only when new output is ready to be inserted in its place.
CellAutoOverwrite is typically set for cells in "Output" style.
See The Mathematica Book: Section 2.10.9.
See also: GeneratedCell, CellEvaluationDuplicate, Deletable.