What I've only recently discovered is that this stitch works even better if you line up the squares so that the loops don't match up but instead are staggered. You then take two stitches through each pair as shown below.
|DOUBLE OVERCAST STITCH
This may seem like a ridiculously small change but I think that it makes a better, smoother fabric. The other reason that I really like this join is that it is crazy strong. I primarily use it when I'm making a blanket on the basis that there is going to be quite a bit of stress on the seams due to the blanket weight and, if at all possible, I never want to have to go back and repair a hole in anything I've made.
Here are a couple examples from a blanket I'm currently working on using this double overcast stitch through staggered loops. The finished side of the blanket is on the left, the underside of blanket is on the right. The finished side lies nice and flat, there is a discernible bump on the underside seam.
|Right side picture is the underside where I have not yet cleaned up all the yarn ends.
One further update on joining techniques.I recently ran into a lady in my local yarn shop who makes scarves using hairpin lace techniques. She showed me a join that works pretty satisfactorily with pin loom squares. You can see a video of the join at One Loop Joining Hairpin Lace Technique. It involves using a crochet hook to chain loops from the squares on an alternating basis to create a very snug and stable join. I have tried it a few times but have not yet figured out a way to make certain that the two squares stay perfectly lined up. So far, my attempts have led to the two squares being well joined but offset from one another. This will take some practice before I would use it in a project to be shared with others.
I think that this join may work really well with pin loom squares that have been woven on a potholder loom. (This is a technique that is demonstrated in the most recent book, Pin Loom Weaving To Go.) Because the potholder loom produces a much lighter, soft-woven square there would be more room to work and this join might be perfect for a scarf or shawl.