Usually when starting an overclock of a CPU you don't touch any of the voltage settings until it is necessary. With either a locked or unlocked multiplier you want to raise the clock speed until voltage is needed to make the computer boot into Windows. For example with a CPU that has an unlocked multiplier you can usually get to 3.7ghz without touching the voltage, the same goes for using the BCLK to overclock.
The i7-950 has a turbo boost option so that means you can set the clock multiplier to at least 33 and that will set the clock speed to 3.3ghz, if you make that setting then you boot into Windows and run Prime95 to see what the temps are and that Windows is stable with the 3.3ghz clock speed.
Once all that is ok you go back to the bios and if your able to raise the clock multiplier to 35 and repeat the process you just did, if the multiplier is locked at the 33 then you can rise the BCLK a bit to get the 3.5ghz. When you are ok with that speed with the testing head back to the bios and set the clock speed to 3.7ghz and repeat the process.
If your able to get to the 3,7ghz with these steps and the Prime5 test is passing and the temps are ok and there are no blue screens then you are ok to use that clock speed. At any point during this testing process you run into stability problems and Windows won't boot or you get a BSOD then a bit of voltage needs to be added, only enough to get the testing passed. One of the issues that you can run into is CPU heat and that needs to be monitored.
I would change the thermal compound before you start, two years is a long time for it to be on the cpu so it does need to be changed. A very thin layer only , too much will have the opposite effect on the CPU and cause heat to build up.