And so i set the cpu fan to run at max speed when it hits 60C in BIOS. But is this too high? Should i set the cpu fan to run at max speed at 55C instead?
For ANY processor the max you want to hit under full load is 60C. If i were you i would aim to get the temperature down to at the most 55C under load. You havent overclocked the cpu much, so im guessing you are at stock voltage? For such a small overclock i cant understand why the temperature is so high but here are some things to check for / try...........
Is the heatsink dusty? if so clean it and make sure all the fins are clean.
Have you increased voltage (Vcore)? If so, set it to default Vcore or even lower it slightly, a 200Mhz overclock doesnt need more voltage and you shud even be able to lower it a little which will drop your temps.
When you put the heatsink on, did you use a GOOD thermal compound like artic silver 5? If not buy some, clean the cpu and heatsink and apply a small amount, it can nock 5C atleast from your temps.
Is there good airflow into your case? If you have fans drawing cool air into your case, make sure the area around the heatsink is free of cables, make sure the airflow to the heatsink is open and circulating. Basicly tidy up those cables to allow the air to move around better.
If you do these things and the temps are still too high, its time to buy a better heatsink and fan. The stock heatsink that came with the chip wont be very good (they never are) but there are loads of heatsinks nowadays in the £30 mark that will do a MUCH better job and in some cases can reduce your temps by as much as 15C instantly!
Hope this helps and if you knew all this stuff already i appologise, never know sum1's overclocking level