but to get to Watford junction it is overground and does accept the oyster card.
To elaborate on emma's answer, both the "London Overground" network (called that by TfL and coloured orange on maps) and other trains run above ground.
The "London Overground" is a now nearly circular railway network of joined up small commuter lines, with a branch from Euston Station in London out to Watford Junction via Watford. All trains on the "London Overground" network stop at all stations so it can be quite a slow ride as all stations is a LOT of stations.
Between London Euston and Watford Junction are two main line railway lines. The red coloured trains are Virgin Trains, the main West Coast operator who run express fast trains north and northwest including as far as Scotland. While you can physically get on one at Euston you can't get off at Watford Junction - they don't allow it on the few of their trains which stop there; it is for boarding only and alighting is prohibited.
The greyish coloured trains with green highlights are operated by London Midland, an outer suburban and inter city company with many of its trains stopping at Watford Junction. Some of the trains are express to WFJ, some make as many as 3 stops on the way, including at Harrow and Wealdstone where you can join the train from the end of the Bakerloo Underground line - which incidentally has been above ground for some time by then. London Midland also take pay as you go Oysters and tap and pay as long as they have been "tapped in" at Euston or Harrow and Wealdstone. They are much faster than London Overground, reaching up to 110 mph at points.
A sister railway company to London Midland is Southern. They run trains south out of Victoria Station all over the south of England and they have a line which runs from East Croydon (connect for the Gatwick airport train and Brighton) via Clapham Junction and Kensington Olympia through Watford Junction, if you will be in West London. The only problem with that service (which continues all the way to Milton Keynes halfway to Birmingham) is that it only goes once an hour. They also take Oyster and tap and go.