The paper considers the iterated function systems of similitudes which sati
sfy a separation condition weaker than the open set condition, in that it a
llows overlaps in the iteration. Such systems include the well-known Bernou
lli convolutions associated with the PV numbers, and the contractive simili
tudes associated with integral matrices. The latter appears frequently in w
avelet analysis and the theory of tilings. One of the basic questions is st
udied: the absolute continuity and singularity of the self-similar measures
generated by such systems. Various conditions to determine the dichotomy a
re given.