What is DDR3 1600(O.C.)? Will DDR3 1600 work in an ASUS M4A78T-E?

It means that the board supports 1600 MHZ memory with settings in BIOS adjusted accordingly.
Kingston does list this kit as compatible: KHX1600C9D3K2/8G
It depends also on the CPU. I would use though 1333MHz RAMs. It's safer. No noticeable improvement if using 1600 instead of 1333.

Agreed. I've owned different clocked DDR3 kits in the past, none of which made a felt difference to performance so I settled for 1333. Those kits are usually cheaper too.

Boy okay, sort of.

What the above means is two fold, first the 'OC' is relative to the CPU's Rated IMC frequency and the list of supported memory frequencies by the MOBO and its BIOS.

Example the Sempron 140 (SDX140HBK13GQ) is Rated at 1066MHz so for that CPU the following is true: 4 x DIMM, Max. 16 GB, DDR3 1600(O.C.)/1333(O.C.)/1066 ECC,Non-ECC,Un-buffered Memory

Beyond that limitation AMD offers both 'BE' (Black Edition) and fixed clocked CPU's, and each CPU requires a different approach to use DDR3-1600 RAM. Looking at the supported CPU listed all of the others I quickly noticed use DDR3-1333 by default.

Non-BE requires a FSB OC:
DRAM Frequency -> DDR3-1333
CPU Host/Bus Frequency -> 240MHz ; stock is 200MHz
* Lower the CPU Multiplier using: Stock Multiplier/200MHz = Adjusted Multiplier/240MHz ; my preference here is to round up
CPU-NB Voltage -> 1.20v
Set both DRAM Voltage & CAS Timings according to the RAM's rated specs

BE:
DRAM Frequency -> DDR3-1600
CPU-NB Frequency -> 2400MHz
HT Link Frequency -> 2400MHz
CPU-NB Voltage -> 1.20v
Set both DRAM Voltage & CAS Timings according to the RAM's rated specs

Also, many ASUS MOBO's offer a very simple solution using the the AI Overclock Tuner -> DOCP, and then Set DRAM Frequency, DRAM Voltage & CAS Timings according to the RAM's rated specs.

For an idea as to what the differences are .... this article has some nice information, Note that in order to keep othe rfcators out of the equation, the performance is measured in fps across a series of games using on board GFX.

http://www.anandtech.com/show/6372/memory-performance-1...

In short DDR3-1600 averaged 8% faster for a 6.7% increase in cost of memory.

Looking at total system cost your return on investment is just under 20 to 1 for a $1200 box....In other words 8% more performance for a 0.42 % increase in system cost.

It's only on paper, In real world... you don't even notice:
http://www.youtube.com/watch?v=ZP4WuzINh-8

^Entirely depends on 'what' you're testing. Example, AMD APU's RAM Frequency is very important, but agreed in most situations since the 'Memory Controller' has been integrated into the CPU for 'most' purposes the differences are not too large. Also taking into account the platform, OC'ing the RAM can raise your frame rates up to +8FPS or even higher in APU CPU's.

AMD APU - http://www.youtube.com/watch?v=z0Z7H1PYUkk
High OC Frequency RAM + IB - http://www.xbitlabs.com/articles/memory/display/ivy-bri...

/edit - the only reason I don't 'push' ultra high frequency RAM in this forum is because -- if you have to ask then you shouldn't be using it -- ultra high frequency RAM is a dual edge sword Stability vs Performance.