Absolutely. There is a reason that the phone/chip ships at 550. This is what Motorola feels is the 100% safe speed to run this at without any possible heat damage.
There is no active cooling on this chip and very little passive cooling that i can see as the entire case is closed. Running at higher speeds will definitely heat this chip up and you could fry it.
My recommendation is to use setCPU for overclocking and set your failsafe frequency once the chip gets to 35-40 C to go down to at least 550.
There a a ton of threads around here discussing OC'ing your CPU. A bunch of people are running 1000, some as high as 1.3 (which they admit is a little insane). I'd say most are happy with 800. The life of a CPU will shorten when OC'ing, but by the time you upgrade phones (even if you wait the 2 years) you shouldn't notice.
From what I gather, 800 seems to be the acceptable overclock that doesn't overheat. 1000 might after endless use without ever "sleeping." However I am running 1000 with no problems so far.
It's recommended that you use the profiles manager inside setCPU. Here's what I (copied off of MANY others) am using:
Charging: 550 max/250 min
Sleep/Standby: 550 max/125 min
Power < 100%: 1000 max/250 min
Failsafe Profile:
Battery >40 C: 550 max/250 min
(The failsafe profile is VERY important unless you make a habit of constantly watching battery temps.)
With these settings, my battery life hasn't taken any hits.
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