Overclocking makes your processor perform higher than stock (makes your phone go faster).
the stock frequency is 528Mhz, I have successfully got it to reach 748Mhz with Netripper's app using Nayr's cabs(or script). Other's have it reach higher than that, and others lower.
Here is what overclocking is for PCs.
http://en.wikipedia.org/wiki/Overclocking
Just a small explanation of what is OC