Spidey I could be making this up but I think that XP is capable of being accellerated by SSE but the accelleration will only be enabled if XP detects SSE upon install. If you want XP to be accellerated then you need to reinstall XP. Otherwise SSE will only accellerate applications running in XP and not XP itself.
I'm not denying it, in fact I could very well be wrong. If I am, some of my programs have been fooled because they let me select the SSE box where before I remember it being greyed out. However, out of curiosity, I ran dxdiag and got the following line on my processor: AMD Athlon(tm) XP1600+, MMX, 3DNow, ~1396MHz
I'm assuming SSE would be listed there if it was available? I'm planning a reinstall of WinXP from scratch in the coming week (right now it's at triple boot - Win98, Win2k, WinXP - time for a cleanup, no?) at which point, if you're correct which seems to be the case, I'll see SSE pop up in the Diagnostic Tool window, among other things.
I've been reading stories about people not being able to OC the AGOIA even past 150fsb.
I got the AGOIA core and it's been sitting at 166 on the FSB just fine whenever I overclock for some video encoding to be done. I think you should be fine - it's other components (memory, your mobo) that should really be limiting factor in that case.