TPTK shorthanded

[Jake (The Snake)]

To start this was not a tournament though only 3 of us remained so it basically became a last man standing scenario anyway. On to the hand...

Hero ~$28.00
BB ~$28.00
Dealer ~$45.00

Hero is SB with ATo

Dealer calls BB of $.50
Hero raises to $1.50
BB folds
Dealer calls $1.00

Flop is: T 7 7 rainbow

Hero bets $5.00
Dealer is All-in

Before the all-in the dealer put on a big show which seemed to me to indicate strength (I thought I had remembered him doing something similar in a previous session). I ended up folding after a long thought but a strong NL player told me after that I have to call there. I have a few questions:

Should I have called? With three players TPTK is very strong but what could his range of hands be to go all-in? I seriously doubted a bluff here but I suppose it was possible.

Also, the NL player told me that $5 was an "overbet." I don't really understand this concept or what it means. Is it too much of a bet? Why or why not?

[SossMan]

Since most players wouldn't have played a 7 like that on the flop, or an overpair like that preflop, I'm probably going to call there. He is most likely betting a weaker ten or an underpair.
If there was a flush draw on the board, it makes the call that much easier.

An overbet would be any bet that is bigger than the size of the pot. Since the pot was $3.50 on the flop, and you bet $5, it is technically an overbet. There are times to overbet and times to underbet...it's more of a convention of gauging how big of a bet you put in at a certain time, rather than a judgement of how well you played the hand.

[Jake (The Snake)]

How does the overbet relate to this hand? The guy told me something about the fact that since I made an overbet I should've called? Something like that I think but I didn't quite understand him.

Can you provide an example or two when overbetting/underbetting is better?

[kdotsky]

When you overbet the pot it look's weak, like you bet so much that you want people to fold. If you underbet, it might look like you want people to call. Since you overbet, your opponent may think you want him to fold and you don't have much. If this is what he thinks (you're weak) then he will raise all in with a wider variety of hands, which makes your call easier.