Overclocking motherboards

All of that hardware is fine. The MSI motherboard is a better bargain because it has more features.

And once you get your parts:

This should be your first stop.
HOWTO: Overclock C2Q (Quads) and C2D (Duals) - Guide v1.6.1
http://www.tomshardware.com/forum/240001-29-howto-overc...

This should be your second stop. You need to know something about thermal management or you can fry your CPU. It's actually kind of difficult to fry a modern CPU, but it is possible.
Core 2 Quad and Duo Temperature Guide
http://www.tomshardware.com/forum/221745-29-core-quad-t...

Third stop will be a guide for your particular motherboard. Google is your friend.

You should be able to reach 2.8 - 3.0 GHz with stock cooler. For anything higher, you will need better cooling. Here are two under $50 heatsinks that are pretty popular:
Sunbeam
http://www.newegg.com/Product/Product.aspx?Item=N82E168...
Xigmatec Dark Knight
http://www.newegg.com/Product/Product.aspx?Item=N82E168...

They both require a somewhat different approach to applying thermal compound.
Suggestions for applying thermal compound:
http://benchmarkreviews.com/index.php?option=com_conten...

And they are pretty large, so they might not fit inside your case.

Go through the first two threads. Do not do anything until you have a good idea about what you are trying to do. Once you have definite questions (you will, you will  ), come back and ask.

Keep in mind that these are guides, not cookbooks. YMMV. Your Mileage May Vary. Because of all the variables, you may not do as well as someone else with a similar system. Or you might do better.
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Overclocking since 1978 - Z80 (TRS-80) from 1.77 MHz to 2.01 MHz

This is quite a bit overwhelming, maybe I while overclock, but I am starting to doubt it for now. I have some experience on computers but not enough.

The ASUS P5P43TD Pro LGA 775 Intel P43 ATX Intel Motherboard - Retail
calls for DDR3 memory. You don't want that.

That is fine with me, I will spend the extra $60-80. Just as long as everything else is fine. What is wrong with ddr3?

Thank You

Nothing wrong with DDR3. Just wanted to save the extra expense.