Hi all,
In my simple mind, I understand it that the cyclic prefix in OFDM is more or less used to avoid the efect of frequency selective channel response by transforming the linear convolution between the input signal and the channel into a circular convolution one.
By doing that, the freq. selective channel response is transformed into several paralel flat fading channel which makes the equalization procedure is much less complicated.
By the way, udit mentioned that overlap-save or overlap-add techniques could be used to avoid the overhead due to the cyclic prefix. I think overlap-save or overlap-add is used in other techniques, e.g. convolution of very long discrete-time signal with a relatively short channel response. I still don't see any connection between overlap-save or overlap-add with OFDM. Furthermore, cyclic prefix is a must in OFDM which means that we should allow this "overhead" to make the OFDM systems work.