You should be able to overclock your CPU to 3.5 GHz, on air, with the stock cooler and at stock voltages.
Here's my BIOS Settings:
CPU Clock Ratio [x14]
CPU Northbridge Freq. [x8]
CPU Host Clock Control [Manual]
CPU Frequency (MHz) 
PCIE Clock (MHz) 
HT Link Width [Auto]
HT Link Frequency [x8]
Set Memory Clock [Manual]
Memory Clock [3.33]
>DRAM Configuration Manually set your RAM Timings. This is very important!
You can get them for 333 if you run CPUz before you try overclocking.
System Voltage Control [Manual]
All voltage entries under this should be set to [Normal]
In other areas of your BIOS, be sure to disable the following two entries:
AMD C1E Support
Cool & Quiet
I am using an AM2+ Motherboard with two sticks of DDR II, 800 MHz ram.
If you have Faster Ram, and/or and AM3 Motherboard, you might have to google around for more specific advice.
Basically, though, when overclocking, you'll want to reduce your Memory Divider in the BIOS by one notch. In the BIOS it's called "Memory Clock".
In the example I gave above, I used a 3.33 divider, because my DDR II 800's default memory divider is 4.00. This way, I won't be overheating/overclocking my RAM very much. My ram winds up being run at 833 MHz.
Oh, and like the man said, you also need a new video card, but that can wait for a while if you are strapped for cash.
The CPU Overclock I'm recommending should allow you to get a decent frame rate at native res
, most of the time, while playing
Final Fantasy X, Final Fantasy 12, Dragon Quest 8, All Dot Hack games, All Wild ARMS games (except perhaps Alter Code: F; I haven't tested that one for very long), and many more games.
Also, make SURE that you disable V-Sync.
While you are testing out your CPU overclock, leave the side panel off of your case (for better cooling).
Here's some helpful links:
] Monitors temps of your CPU and can test for stability.
I wouldn't really bother with Prime95, unless you try and push it further than 3.5 GHz AND have a better heatsink/fan and/or water cooling.
Try to not go over 60 degrees Celcius on your CPU Cores.
That's the recommended safe limit for heat on your particular CPU.
The most stable speedhacks I've been using are as follows:
If you move those slider bars to the right, you can get game crashes and false FPS Readings, so use at your own risk.