The tactical overlay is a view that you can turn on while you're in your ship by pressing the button with the target on it to the left of the capacitor. It shows concentric rings centered on your ship.
The concentric rings denote the distance, in km, from your ship.
When you hover over a weapon turret or other type of module restricted by distance, a sphere or two will appear around your ship.
If you see two spheres around your ship, this means that the turret that you are hovering the mouse cursor over has an optimal range and a falloff range.
The inner sphere always shows your optimal range. Enemy ships on or near that sphere are in your optimal range, where your turrets have the best chance to hit them. It doesn't affect how much damage you deal; it just denotes how likely your weapons are to hit the enemies.
Your turret tracking speed will also affect how likely you are to hit the enemies, to the point that even if a ship is in your optimal range, you could still miss if the ship is circling you faster than your turrets' tracking range. In other words, optimal range is by no means a guarantee of hitting the target.
The outer sphere represents your optimal range plus falloff range. Ships that touch this sphere or are outside of it are extremely unlikely to get hit by your weapons.