From the P4 data sheet
"Thermal Monitor uses two modes to activate the TCC: Automatic mode and On-Demand mode. Automatic mode is required for the processor to operate within specifications and must first be enabled via BIOS. Once automatic mode is enabled, the TCC will activate only when the internal die temperature is at very near the temperature limits of the processor."
I disabled mine in the BIOS (without knowing what the option was for) and lo and behold, my P4 runs at 76C. Ouch
I assume the TCC uses the value from the thermal monitor (which will be the same temperature that your BIOS will show).
So, the P4 will throttle back, the data sheet doesn't give an exact temperature at which this will occur (or I missed it), but only if the feature is enabled in BIOS.