Every processor has a maximal voltage it can take before it begins to be damaged. For most C2D's its around 1.3-1.4v, with the specific numbers varying based on the processor, the revision, the batch, etc. Generally, to get any overclock above something minimal like 3-5%, you're going to need to bump up voltage a bit. This bump in voltage will greatly affect the temperature your processor runs at. Mine went from 55C load to 68C load when I OC'd to 3.4ghz on my Q9550.
There is also the question of whether or not your processor can handle the higher speeds. Some chips, such as Q6600's have been OC'd to over 4ghz from their stock speed, others can barely get to 3ghz. It really just depends. The best way to figure out if your overclock is stable is Prime 95 or Linpack. Prime 95 will tell you whether or not the processor is generating errors, linpack will mainly stress it to the max to see if your temperatures are acceptable.
That brings me to another point. With a stock cooler, you cannot do much overclocking. The stock cooler just cannot keep your cpu cool enough to run stable. In this case, you want to have a more efficient cpu cooler. Stuff from Noctua or Thermalright is great, but a little expensive. Look on HardOCP or bit-tech for their reviews of CPU coolers and find what is acceptable to you in price/performance. With a C2D, you do not want your temps going over 75C since that starts to get pretty bad for the processor.
You seem like you've just heard about what it is, but not how to actually do it, so I suggest you read how a cpu speed is determined, what core voltage does, what FSB is ( since you have a C2D, you're going to be dealing with the FSB and multiplier, not BCLK like on Core i7 ) You also want to find out if your motherboard supports any sort of overclocking. Most basic ones do not, beyond possibly changing the multiplier ( and even then, you can only lower it, not increase since intel chips are multiplier-locked).
Also go read this:
http://www.hardforum.com/showthread.php?t=1198647
Its a very helpful, step-by-step guide on how to overclock C2D's. Read it, understand it, make sure you know what you're doing. Ask questions if you have them. As long as you're careful, there will not be any damage to your processor or system.