The Pixelmon overlay allows you to interact with the Pokémon in your party. The overlay displays the health, gender, and level of all Pokémon in your party and is your base display when playing Pixelmon.
All the keys used to interact with it can be modified in the options screen but their defaults are:
Send/Retrieve your Pokémon (R)
Using this button will cause the currently selected Pokémon in the overlay to be sent out into the world (if currently in its Poké Ball) or retrieved back into its Poké Ball (if not).
The Pokémon will be sent out in its Poké Ball and will be thrown from the player. Upon touching the ground or another Pokémon/player/trainer the Pokémon will spawn at the point where the ball hit. This is also used for starting battles.
Select Previous/Next Pokémon ("[" and "]" respectively) in your party
This allows you to choose the Pokémon that you want to send out or receive. Note: All the Pokémon from your party can be out at any time; when one is out switch to the next and send it out too.
Minimise/Maximise the Overlay (O)
Using the minimise button will cause the overlay to go to its smaller form, which is useful for those with small screens or those who want a less intrusive overlay. The minimised overlay does not display health or level though. To restore the overlay back to full size, use the minimize button again.