I think that Kurt Cobain was a more talented musician than Eddie Vedder in the sense of the melodies to the songs he created and his guitar playing abilities. Stone Gossard and Mike McCready wrote most of Pearl Jam's melodies and I don't think Eddie Vedder really learned how to play the guitar until after he joined the band (and I almost want to say that it was until "Betterman" that he played guitar on an album but I could be wrong). As for song writing ability, I think they were both at the same talent level. Then again, HUGE Pearl Jam fan here so I could be biased.
As for Kurt Cobain being overated...yes and no. I think he was an extremely talented but I wouldn't go as far to say he was the voice of a generation or compare him in anyway to John Lennon. I often think that if he hadn't passed away so early that people wouldn't worship him in the way that they do. Think about all the rock stars out there that we think of as being the being inspirations to rock music. Kurt Cobain, John Lennon (although he deserves the title of being the voice of generation), Jimi Hendrix, Janis Joplin, Freddie Mercury, and Jim Morrison. All died very young and within the prime of their careers. There are many other musicians out there who are talented but aren't given that same "rock talent" title because they didn't die a tragic death.