When overriding theme functions in Drupal 7 you would normally copy the theme function into the template.php and alter it to suit your needs. This isn't always convenient though, especially if you are trying to abstract functionality into modules and not have code in your theme layer that is reliant on module code. If you add theme override functions to your module files then they won't do anything as Drupal isn't looking for them there and won't pick them up.
It is possible to alter the theme registry in order to get Drupal to pick up your theme functions from your module code. This helps collect together code that performs a certain task and allows you to deploy theme alterations along with module updates.