So if someone is in the same vicinity as us, are we able to see them or sense them in any way? And if they are picking up items, do those items just magically disappear?
No, there's no direct player/player interaction (yet). This can make for some funny overlaps in timelines. Terrain is loaded when you get close to it, and saved when you leave it. If you're in a house, and I come in and drop a bunch of stuff, and then you leave, when you leave you'll save the version you see, without my stuff in it, and that stuff will disappear forever.
Fortunately, since the world is huge, this kind of thing rarely if ever happens.
Looks like an encrypted/not plaintext file to me. (Sorta like if you open up a .exe file or something in a Linux text editor.)
No, the overmap save files (o.#.#.#) are in fact plaintext. That huge string of characters on the first line refers to different terrain types. Below that, the "Z 3 6 310 2 52" lines mean "A group of monsters, type 3 (3 is zombies), with radius 6 and population 310, centered at (2, 52)". The 't' lines are locations of towns, 'R' is roads leading out of this section of map, and 'T' are the locations of radio towers.
That said, I can't tell what's wrong with this overmap! alfie275, if you want to email me a backtrace I'd appreciate it.