OC'ing a XTX, is like throwing methanol in a Zonda. Senseless, and not worth the risk.
As for settings, it will depend on what game you are playing. Older games (some of them), you can almost crank right up, while newer ones aren't so forgiving. No matter what top end gcard you have, there will always be something to bring it to it's knees - whether that be game engine or excessive settings. Bottom line, play around and see what suits you.
As for third party cooler, look for something that cools the GPU aswell as the memory chips. Arctic Cooling Accelero X2 to me is the best choice, as temps are lowered on GPU/VPU(does ati still go with this name?) and memory controller PLUS noise is dramatically reduced - check tomshardware.co.uk as they had a proper review on all major contenders for X1900 cooling.