Best done through the BIOS, you change the clock speed (MHz) and/or multiplier (i.e. 9x) of your FSB (Front Side Bus) (and RAM, but there's no RAM multiplier (that I know of)).
Increase FSB/multiplier works for a bit, but then you need to increase the voltage to allow higher clocks. However this creates heat, hence why OCing tends to require good aftermarket cooling. Eventually you reach a point where your board (and cooling) just isn't designed to handle the voltage needed to keep pushing your CPU.
Oh, and every CPU is different, even the exact same make+model+etc., so they all require different voltages and multipliers and clocks and so on.
And that information I gave you is actually fairly vague. If you want more specific information, I can give you links and such.
I'm no OCing expert however, I'm sure others can explain it much better
Your question is actually asking quite a bit. I could probably type a short novel trying to explain it all as it varies depending upon the the platform your PC is based upon. What are your system specifications and we'll determine if you can even overclock your PC
Well I'm 800 miles away from my comp atm, but it was running fine when I left (and had been for a month at least), I underclocked it a bit to about 740MHz but other than that it's exactly the same. My RAM's settings are what I set them at