Would anyone recommend or condone the use of a gps in lieu of an adf in a ndb approach?
You are in Australia mate The skull would have you locked up for such foolishness
I believe overlays are legal in the States?
I'm not sure it's an overlay in the strictest sense that's being asked about here but substituting what nav aid the bearing pointer is selected to. In other words instead of having the bearing pointer selected to the ADF it is selected to GPS and the NDB is the active waypoint on the GPS. So you're not flying a GPS track, you still need to track the needle, except it's not waving around nor affected by coastal refraction etc
This method does work well and I have used this to back up the fixed card ADF indications. I believe one of the Air NZ Link operators used to select the No2 EHSI pointer to the GPS on the non flying pilots side to monitor the accuracy of the ADF signal.
I doubt it's legal to us the GPS bearing pointer as your primary means of shooting an NDB approach. If you did use the GPS waypoint as a back up you do need to be very very sure that you have the correct waypoint as the active waypoint on the GPS.
It's not like an NDB where if you got the wrong frequency it's highly unlikely you'll get a a valid signal plus you should be monitoring the morse signal anyway. A bearing pointer selected to GPS will pointer very nicely no matter what waypoint is active.