The override-file, if given, is used to set priorities in the resulting index records and to override the maintainer field given in the .dsc files. See dpkg-scanpackages(1) for the format of this file. NB: Since the override file is indexed by binary, not source, packages, there's a bit of a problem here. The current implementation uses the highest priority of all the binary packages produced by a .dsc file for the priority of the source package, and the override entry for the first binary package listed in the .dsc file to modify maintainer information. This might change.
The path-prefix, if given, is prepended to the directory field in the generated source index. You generally use this to make the directory fields contain the path from the top of the Debian archive hierarchy.
Note: If you want to access the generated Sources file with apt(8) you will probably need to compress the file with gzip(1) (generating a Sources.gz file). apt ignores uncompressed Sources files except on local access (i.e. file:// sources).
The source override file is in a different format from the binary override file. It contains only two whitespace separated fields, the first is the source package name and the second is the section. Blank lines and comment lines are ignored in the normal manner. If a package appears in both files the source override takes precedence for setting the section.