THe cas latency is the time it takes the memory to process the data. It is a physical aspect of the memory just like the frequency. Just like you cannot make the memory physical frequency faster, you cannot make the latency lower.
So the lower the latency, the faster the memory will react.
Changing from DDR to DDR2 will only work if the motherboard is adapted to it. For example a PC3200 has a frequency of 400 Mhz. If your motherboard FSB can be overclocked and it has the slots to take PC4000 for example, then you can overclock your motherboard, but make sure you have adequate cooling.
Note: DDR and DDR2 don't have the same number of pins!