I agree with ajfink. Running an E6600 at 3.05GHz, see my signature. In a tower case the graphics card will tend to be below the CPU. Since heat rises I reckon it would tend to heat up the CPU, not the other way round. Anyhow, very happy with my passive (silent) Thermalright HR-01 and the associated fan duct, which evacuates CPU heat straight out the back. Also the heatsink remains cool to the touch, even when CPU is under load.
I have found that it's a voltage increase much more so than frequency increase which will cause the CPU to get hotter. Since voltage increase is not usually required to overclock an E6600 up to about 3.2GHz, water cooling will be overkill in my opinion.
Although I haven't used it, I'm not sure I agree that water cooling helps decrease the air temperature in the case. Usually a CPU fan contributes to air movement, which you will be missing, that helps cool the Northbridge and voltage regulators located around the CPU socket. That said I've had no problems with my motherboard despite use of a passive CPU heatsink. Went for a motherboard with heat-pipes though, just in case.