I would say the most overrated "weapon" is deuse-ex-power-up due to anger/love/the power of friendship.
On a different note, I feel a slight need to stick up for the sword here. This is rare for me, because I'm normally the first to point out that almost every single weapon in existence out performs the sword. However, in order to effectively argue this point, I had to know what I was talking about first. As such, I have something that needs to be pointed out as to why the sword got so highly valued here in the first place in a manner disproportionate to it's combat effectiveness.
Someone rather aptly pointed out that the sword was always the side weapon. So, yes. This IS true. Swords WERE always the side weapon. Now, think about that for a second. ALWAYS.
There is a pretty simple but deceptively powerful reason why swords were so frequently in circulation to the point they were always carried as side weapons. That is, they are an incredibly portable weapon compared to other options. Something the likes of a spear is very difficult to strap to your body, so you either have to carry it by hand or put it on a cart. The same goes for things like maces or axes to a slightly lesser degree. You can holster those or attach them to your belt, but they flop around and are far more difficult to secure than a sword in it's scabbard.
That's another issue, things like axes don't have a scabbard. So, the blade is constantly exposed to the elements and the blade will be weathered down.
Yes, in pure damage-dealing ability, almost every single weapon option under the sun does more damage than a sword. However, you really can't knock the amazing versatility a sword has. The convenience of carry and the relatively easy time you have cleaning it compared to other weapons and the ability to decrease maintenance needs by sheathing it all add up to make a very convenient weapon that will be far less likely to let you down than any of the other options.
EDIT: To put this concept into perspective, a rifle generally has more power, shoots more accurately, and can propel a projectile farther than a pistol can. It also has more options, such as different kinds of shot-guns back in the old days or in more modern times we now have rifles that can go fully automatic which is not an option available in most pistols. However, if you look at the old west, it was always your trusty six-shooter at your hip that you would rely on. This is because it's a weapon that can always be at your hip while a rifle is far less convenient to carry around and you would likely leave it behind unless you were guarding a stage coach or something.
This would be the exact same mind-set of a person in medieval times. They might not be able to carry a spear 24/7, but their sword can always be at their hip.
The overrated thing about swords comes from failing to understand the important but reasonably restrained place that swords occupied as a versatile side-weapon. A side weapon is immensely valuable, and it would indeed make the sword a more popular weapon than any of the more battlefield-effective weapons. However, it has to be kept in mind that those other weapons ARE more battle-field effective.