In a tight job-market, it is not uncommon to hear job-seekers complain of being turned away for being over-qualified. Ok, let's get real. Stop comparing being "over-qualified" to having "too much fun", they are nothing alike. Being over-qualified is a real risk. A real red flag.
What are the risks? When I see the resume of a candidate that is clearly over-qualified, a few things come to mind.
Will the candidate quickly get bored in this job?
Will they come across as a know-it-all to their co-workers?
If the pay is a lot lower, will they obsess about the pay? And most employees that think only about pay don't stick around long.
Know your limits. Most over-qualified candidates say they don't mind the cut in pay, or the step down. That's not enough. Know exactly how much you are willing to take as a pay cut, and how much you (your ego) can step down. Don't look beyond your limits. If you're unemployed, it's easy to imagine yourself taking any job just to get a paycheck, but that is easier said than done.
Tailor your resume to the specific job. If you are a former restaurant manager applying for a server job, don't highlight your management experience over your experience waiting tables. Focus on what the prospective employer needs. You can (and should) explain your situation concisely in your cover letter, but don't use the same resume you would use for a manager job as you would for a server job.
Don't ignore what might be a red flag. Explain why you might be taking a step down and tailor your resume to the specific job, highlighting what the employer needs.