How does Iray deal with back facing or overlapping meshes? (v1.1)

1. Objects in Iray do not have backface culling. This is by design so as to not break the physical correctness of the path tracing for indirect rays.

iClone Render Iray Render

2. Due to the physically accurate nature of the Iray renderer, overlapping faces will create visual artifacts when rendered.

You should get rid of the overlapping faces in another 3D application.

If you have acquired the asset on SketchUp in SKP format, you can do the following to delete the overlapping faces:
1) In 3DXchange, go to: Menu > Edit > Exclude SKP Back Faces.
2) Execute Hide Excluded.