Dell Vostro Dual Core Upgrading Mid Level Gamer

Hi,Please excuse my Ignorance. I purchased a used Vostro 22 @ 1.6ghz
Dual Core. I have Upgraded Ram from 1 gig to 2 gig and Installed a GeForce GT220 Graphics Card with 1Gig DDR2. The Machine Runs pretty Good and Is Playing My Sons Games that would not Play before the New Vid Card. My Question is what is the Fastest CPU Upgrade I can put in this Board without Overclocking?
Am I better Off doing the Pin Mod for the FSB from 200 to 266?
Or Can I do Both a Faster CPU and the FSB Mod as well as Overclock the New CPU. I was told by the Local "Craigslist PCU Guru" that a 2.4 CPU would "Slap right in there" ,which made me a bit skeptical. I have built my Own Pcs since the Pentium 90 Days but always buy Mobo Bundles and build by the Specs,this is my 1st Attempt at trying to get something out of less than something. I am hoping to do a CPU Upgrade and Overclock to get in the 2.4 to 2.8ghz range is this possible with stability in Mind. Are there Peltier type coolers for these Dual Core Machines or would it even be needed,I would prefer to stay away from Water Cooling and the expense. Thank You In Advance for your Opinions and Advice.
Adam,Las Vegas