Window overlays seem inefficient here, given this line in the docs: "due to a different implementation, overlays generally don't scale well (many operations take a time that is proportional to the number of overlays in the buffer)" and the following recommendation to avoid them when dealing with "the visual appearance of many portions of the buffer". I don't quite know if that applies here since I'm actually affecting the entire portion of every buffer extremely often. I would assume so.
Then again, I don't really know elisp. And I only just started using emacs a few months ago. So who knows, maybe I'm way off.
-Steven