It might be dirty, that could slow it down considerably, if your mobo can support it you might have a means in bios to control speed vs temp, but its not a standard function, worth checking for though.
Not sure if 60C is that hot for an intel? my 3200+ barton is 49-51C @idle,
1000rpm does sound slow, but are you sure it is reading it right, I seem to remember some scaling factors in speedfan that you have have to set so it would read right, depends on the number of coils in the motor windings perhaps?
Also check your volts, I believe that the CPU fan runs off +12V, although I doubt that would have dropped to very low levels and leave you with a PC that is working.
if the cpu is that hot while idleing... the heatsink is not seated properly, or you don't have good covereage of the thermal paste.... or possibly too much paste was used. Reseat the heatsink, apply new thermal paste (Arctic Silver 5 is very good paste), make sure it's a PAPER THIN layer spead evenly over the metal capping on the cpu.
"im running on P4 3.0 HT 775" unfortunately doesn't tell me if you have a P4 530, or a 630... but either way... i have a 630 OC'ed to 3.4 and it idles at about 32C, and under load gets no higher than 50C on stock cooling.
If you don't have any AS5 laying around... you can get some here
same problem I experienced, my intel fan needed cleaning, I did so but I went from 46C to about 56C at idle, if I played a game my PC would shutdown. So even if you clean it and put new thermal paste you still might not get it to cool your system any. I broke down and spent a few $$ to get a new CPU fan, OCZ Vendetta 2 90mm fan and WOW what a difference, my idle temp went to 33C and 44C under load, big difference and well worth the $$ to save my CPU, works for Socket 775 and AM+ boards.