In a boiler, energy from the fuel is transferred to liquid water in order to create steam. Once the water is heated to boiling point, it is vaporized and turned into saturated steam. When saturated steam is heated above boiling point, dry steam is created and all traces of moisture are erased. This is called superheated steam.
Superheated steam has a lower density, so lowering the temperature does not revert it back to its original liquid state. Dropping the temperature of saturated steam, however, will revert it back to its old form of water droplets.
Superheated steam has more energy and can work harder than saturated steam, but the heat content is much less useful. This is because superheated steam has the same heat transfer coefficient of air, making it an insulator and poor conductor of heat.Saturated steam is preferred for heating applications, while superheated steam is used mostly in power generation and turbines. If steam is needed for both power generation and heating, the steam can be superheated then desuperheated to its saturated condition.