Latencies and timings

Also if I run the timings slightly under the Memory SPD is this likely to cause damage/problems at 400MHZ my SPD is 5-5-5-18 but everything appears fine at 4-4-4-12 333MHZ.

Run Prime95 or memtest86+ to validate your choices.
If you get memory errors go back to SPD timings.

Latency is a measure of how quickly in bus cycles that a memory chip operates. Lower is better. The main problem with trying to run memory too fast is instability.

How much difference does running at lower latencies make? You need a benchmark to measure. I am running Crucial Ballistix (DDR2-1000) at 367 MHz (367 X 9 = 3.3 GHz). Going from 5-5-5-15-2T to 3-3-3-7-1T gives me a 6% increase in memory speed. Going from -2T to -1T accounts for half of that.

I deliberately over-speced memory because I had hopes of OC'ing higher. I can reach 3.6 GHz with some semblance of stability if I run vcore at 1.6 volts (shudder). On the other hand, a Penryn CPU (higher stock bus speeds) should work in a 680i motherboard.

The timings that you have changed are your primary timings. What timings represent is the delay between specific operations within the module. Lower and tighter timings will give you less of a delay, thus lowering the latency. However, higher frequencies mean that the memory has a higher bandwidth and can process more information faster. On Intel based platforms, timings play a minor role compared to overall frequency compared to an AMD based platform where overall frequency plays a minor role compared to timings. However, tighter and lower timings do not hurt performance. When overclocking memory, the goal is to find the maximum possible frquency. From there you then find the tightest possible timings and the lowest possible voltage with which the memory remains stable.