I have heard this term many time and would like to know what does it exactly means?
It basically means that people will alter the settings for their CPU (processor) to go faster than it was designed to do so. By increasing the CPU frequency, you're also obligated to change speed settings for RAM, the system bus and so on. So if you have an Intel or AMD processor that say runs at 2.0GHz, you can overclock that processor (depending on a few variables) to run at 2.3GHz or 2.4GHz.
- The good thing about overclocking is you can get better performance out of your computer without paying extra for a higher model. Most people who overclock are gamers, but I'm sure there are other uses for overclocking in computation and such.
- Heat - Faster CPU means more electricity which means more heat. Heat can kill computer systems. Improperly cooled and overclocked CPUs can die a lot faster than you think.
- Cost - In order to increase the speed, better cooling is necessary to dissipate the heat. From water coolers to fancy heatsink/fan solutions, you should put forth some money to address the heating problem.
- Possible Damage - People forget that by overclocking, you're going out of bounds for the manufacturer's specification. The extra work, electricity, heat can (over a period of time) damage your CPU. If you deal with heating properly your odds of damage decrease, but it's always a risk.
Personally, I don't overclock. It's a risk with little to no benefit that I can see. Others may feel differently, but I hope this answers your question.
Overclocking is the process of running a computer component at a higher clock rate (more clock cycles per second) than it was designed for or was specified by the manufacturer, usually practiced by enthusiasts seeking an increase in the performance of their computers. Some of them purchase low-end computer components which they then overclock to higher speeds, or overclock high-end components to attain levels of performance beyond the specified values. Others overclock outdated components to keep pace with new system requirements, rather than purchasing new hardware.
Overclocking any component comes with inherent risks. Generally running anything faster will cause the heat to be greater, which can lead to a much higher failure rate. This is why most people will not tackle overclocking unless they are certain that their components are tolerant enough of the changes (and even then will only up the speeds in small increments) and will have good cooling systems in place to help mitigate the problem of heat.
In addition to what TheTXI posted...
You are running the hardware beyond its rated limits. It can void warranties and damage hardware. You can see weird errors depending on the issues. It varies from each combination of hardware. It is mainly for the hobbiest or someone who wants to take the risk to get that little extra performance out of their machine.
Overclocking means running a component faster than the maker of your system intended. This can mean excessive heat and cooking things, or it can be no big deal. For example, 11 years ago, Intel stoped making the mobile Pentium 75 that Toshiba used in their Libretto 50ct micro laptop, so Toshiba substituted the P120, and just undercloked it. If you had one of those, going to 120mhz would not be a big deal, and many could be overclocked to as much as 200mhz.
Often a manufacture will want, say , 1/3 at the highest speed, 1/3 middle, and 1/3 slow. Each will be tested only to meed the needed spec (though they may route the chips from the center of the wafer to the high speed group, for instance). This doesn't mean the slower stuff would not have qualified for the higher speeds, or that with a better heat sink they would have.
You can overclock with software (often this can be done for video cards), bios (your cpu/mb/ram), jumpers (old school for that), or hardware mods (cutting or replacing wires, changing clock chips, etc).