Well if you want to learn how to overclock, look no further. Someone already made a guide for that a long time ago. If you're computer was prebuilt, the bios might be locked to prevent you from overclocking, but if you built it yourself, you shouldn't have any problems.
I don't think you need water-cooling just yet. Try to get a stable overclock first, and check the temps. If they are too high, try adding a Zalman heatsink, and some more fans. If you still need more cooling power, then go for water-cooling. It's just not worth it if you're not doing heavy overclocking.