It'd only be the temp stopping you from overclocking if its getting hot, but at 2.6ghz, it shouldn't be that.
Its something that your not configuring probably.
I know I tried to give you the best instructions I could, but every board's BIOS is ever so slightly different. It could be the memory, if you haven't set it to 1:1 ratio for example if set to 400mhz on the FSB of the CPU?
As for resetting the BIOS, this is a simple procedure with ABIT boards, as there is something called a CMos Jumper, or even a CMOS switch, which will reset the BIOS back to default. This may happen a few times while overclocking, and its nothing to worry about, though it is very worrying when it first happens as you found out
You can only damage the CPU if you put too high of a voltage on it, but you shouldn't have to increase the voltage from stock at all until you get to a certain point.