In various embodiments, an interactive display overlay system is configured to serve as a gatekeeper for detected inputs on an interactive display screen (e.g., such as an interactive whiteboard or touch screen display) that is displaying a transparent overlay layer over an underlying software application. In various embodiments, the system is configured to detect an input at a particular location on the interactive display screen and determine whether there is a widget at that particular location on the transparent overlay layer before passing the input on to the underlying software application. In particular embodiments, the system is configured to modify inputs detected at the overlay layer that are proximate to a widget to an edge of the widget prior to passing on modified input data to the underlying software application.