Overclocking a computer allows you to squeeze extra power out from your computer’s hardware CPU , GPU , memory. When the hardware is operating at faster clock-rates, tasks will be performed quicker. This means better frame rates in games.
The main risks involved with overclocking are: creating system instability, more heat.
Almost all CPU that are damaged during overclocking have been a result of too many volts. Too much voltage leads to overheating, and overheating leads to fried CPU.
Overclocking is recommended to everyone who is wanting extra performance out of their computer. Just do it slow and test bit higher clock speeds and run test. Look how warm system gets. And do this meny times as you want or system crashes. Then you just go back to slower clock speeds and voltages and you are fine.
Overclocking a cpu in theory will give faster fps as the cpu is processing more instructions per second. However as other posters have noted it depends what is limiting your specific game. I experimented with different overclocks in Metro 2033 for example with an i5 2500k and it didn't improve fps - I noticed the same in Just Cause 2. However Crysis benefited from overclocking as it seems to need plenty of cpu power as well as gpu. Some of the strategy games such as the Total War series seem to benefit a lot from cpu overclocks. However much depends on the balance of your system. If you have a very weak gpu overclocking the cpu won't do much - you really need an more powerful gpu to reap any benefits.