I've got a MSI P6N Diamond and a G0 Q6600. I'm new to overclocking but I read up on it and I'm not looking for an absurd overclock. I'm aiming to get it to 3.0GHz. However, no matter what I do, it won't go above about 2.7. If I can get it to post, it won't boot Vista. It just crashes and reboots....

Now I've been thinking and I was wondering if anyone can answer the following question: if I put way too much thermal paste between the CPU and heatsink (Zalman 9700 NT) could that be what causing my processor to shut off? When I ran Core Temp it all the cores were idling around 40C and running Prime95 made them shoot up to 60+C (with no or almost no overclock). Now I'm not an expert, but from what I read that's way too hot (ambient is 21~22C)

Is that what it is? Or do some Q6600's simply not overclock well?

If you put too much, yes your cpu will overheat. http://www.arcticsilver.com/pdf/ap [...] d_wcap.pdf
I usually do this.

You should have a load core temp much lower than 60C on stock speeds before OCing.