I don't think it was completed at that time. It could have only been sent into the network, and then Overstock assumed that you will not double-spend the coin. In most cases this is true; however you cannot build a large payment system on a hope that only honest people will be using it.
To elaborate on that: (link)
Bitcoin confirmations represent the number of blocks in the block chain that have been accepted by the network since the block that includes the transaction.In simpler terms it represents the difficulty of a double spend attack. With only one confirmation there is about a 50/50 chance that a double spend is possible since the next block that is solved may confirm a different block instead of the one that has the transaction and that block my show the coins being spent elsewhere. The odds that a double spend has occurred gets exponentially smaller with each confirmation.
An attacker must match the power of the entire bitcoin network to keep up with block creation so as time goes by it becomes increasingly difficult to forge a transaction.
It is generally accepted for most transactions that 6 confirmations represent enough security to assure the transition is valid.
And here is another good explanation, from the same link:
If you don't grasp the basic concept, imagine for a second that a network outage split the bitcoin network in half. I could send one transaction giving 30 bitcoins to Abel to one half and one transaction giving those same 30 bitcoins to Fredto the other. Each half would accept that transaction and until the two halves reconnected, you wouldn't know which transaction would be honored tomorrow.Confirmations are simply blocks that have been generated after the block that contains your transaction. Because there is no central authority that can be consulted to be sure a transaction will be committed, recipients use the number of confirmations as a way of protecting against double-spend attacks.
The network is always trying to extend the longest chain, and eventually, some chain will win. The deeper the transaction is in the chain, the higher the chance it will win because the network tries very hard not to duplicate efforts. (Because miners want their coinbase transactions to win, they all try very hard to extend the chain most likely to win, which makes sure it does in fact win.)
Effectively, the more confirmations, the higher the likelihood that a transaction will remain forever in the public hash chain rather than a conflicting transaction if there was one. At 6 confirmations, it is perhaps one in a billion that a transaction won't be permanent -- and that's if the sender is attempting a double spend attack.
As the blocks come at a certain rate (6 per hour) you may need to wait from 10 minutes to 1 hour to get enough confidence that your transaction is now "cast in stone." Until then it may be outvoted by the majority. This is how the Bitcoin network fights double-spending.
This is why I am sure that Overstock simply accepted your payment on a honor system. There is no alternative for them, since they cannot request a customer to wait until the payment is confirmed. And there is no risk for them either because they have all the time in the world to wait until the payment clears. In a c/c transaction it is done in your presence, and you are given a confirmation number. In a Bitcoin transaction you can get your own confirmations if you know how. If Overstock does not receive confirmations, they will not ship the product - it's just that simple.
Unfortunately, this mechanism does not work when the payment has to be here and now - such as when you buy in person. Either the store has to trust you and allow you to walk out with merchandise, or they have to put you into a "holding area" where you will spend the next hour waiting until your payment clears. I'm sure that very few people will agree to that :-)
So we need to be very clear. When you say that your purchase was completed in one second, it only means that you entered the transaction data in one second. It's like if it takes me a second to swipe the card and then one hour for the purchase to be approved :-)
This whole mechanism of confirmations reminds me of a mountaineer who has to scale a mountain, all alone. He has to climb, step by step, and pound his own stakes into the stone to support him. If there is another climber, he has to do all this all over again, from scratch. This is how Bitcoin forces you, and me, and him, and his dog to prove that you did not overspend. This is a mathematically correct way, but it is amazingly expensive. If I need to travel to the top of the mountain, I take my car and I drive up the road. If none is available, I take the cable car. Both are good for large scale, unskilled use. If we set the paranoia of pure math aside, we can implement a far simpler system that (a) trusts you, and (b) catches you if you misbehave. This is exactly how the entire world operates, not only in the sphere of money. It may be electronic money - as I said, I have no objections - but the system must be usable; at very least it should be just as convenient as the existing card networks. I understand that Bitcoin was designed as a largely anonymous system - and then it required such complications to remain sound. However most people in the real world do not need an anonymous payment system that comes at such a huge cost.
There may be some low tech solutions to the POS issue, one might be a check against known addresses which have attempted to double spend in the past, or a check against those that have history of no issues, and etc. Doing so would give a higher degree of confidence and would only take a few milliseconds. There are a lot of smart people, and you sound like one, who are working the problem and finding solutions/fixes.
I certainly don't have all of the answers, only have seen the practical side of how well it worked for me in this particular instance.