Are CPUs of the same family the same chip, just with a different multiplier?
Take for example, a Prescott Pentium 4 (that's what I am using). Are all these chips identical, with only the multiplier being the difference? Or are there actually physical differences between a 3.0 ghz and a 3.6 ghz Prescott? Does overclocking a CPU the exact same thing as getting a CPU with a higher frequency?
In your case, yes they are the same chip, with the exception that during manufacturing (after speed/quality testing) Intel locked the max multiplier.
Overclocking is normally not the exact same thing as getting a CPU with a higher freq, since when overclocking, you are normally boosting the speed of the FSB, which when multiplied by the (fixed maximum) multiplier gives you the final core speed. A faster chip from Intel will run a normal, non-boosted FSB, but with a higher multiplier to give the same final core speed.
In practice, if the overclocking works (a big "if"), then the overclocked chip is actually slightly faster than a chip from Intel with a bigger multiplier giving the same final core speed.
It's the price structure of the CPU business, which is derived from the differences in CPU quality during manufacturing. Long story short, many different models of CPUs come from the same CPU architecture. The best quality CPUs are sold at higher speeds and higher profits to make up for losses in non-working/lower quality CPUs.
"And yes it costs intel EXACTLY the same amount to make a $20 cpu as it does to make a $1000 cpu" except the $20 chip probably will not pass the same speed tests that the $1000 chip will. And in the case of the $1000 "Extreme Edition" chip, there's a fair amount of marketing involved.