Im not a pro at this stuff but I did unlock my xp1600 and I currently have it running at XP2000 levels. Every chip is different so overclocks can vary but it does seem that certain ones do better than others and that has alot to do with the steppings. If you have a heatsink/fan that is recommended for up to an XP2100,it very well may be enuff for the task. You can always try it and if you see your temps are going to high,you can just purchase a better one.
If you just plan on overclocking your chip by using the FSB(front side bus),keep in mind that you should have quality memory and of course a motherboard that allows you to adjust the FSB. You can unlock the chip as well and overclock it using the multiplier in addition to the FSB but thats a whole separate procedure.
Bottom line is abitaz,search this site and other overclocking sites and look for how to guides and keep reading these and other message boards until your comfortable enough to do it. It really isn't that hard and yes there are a few risks but they are minimal if your careful. Most times, if you push your overclock to much,your machine just freezes up and you can just restart your pc or you have to reset your motherboards cmos. Heat is one of the main factors in overclocking and so keeping an eye on your cpu's temps is important so you have to look around and see what other people's temps are to know if your within safe levels.
Like I said,just keep on snooping around these and other message boards and you'll learn quick.
Good Luck.
Edit:I'll also add that overclocking using you FSB may stress out some of your components and "could" even cause failure but I have yet to see anyone ever post that they have permanently damaged a component but theres always that risk.