Ideally, you would achieve the following:
1. Front Side Bus Speed se to 200Mhz (Same as the new RAM.)
2. Multiplier set at 11. That would be 3200+ speeds.
3. CPU temp below 55 degrees C at FULL LOAD.
4. Only the "new" RAM installed ( the old RAM will cause the new stuff to run at 133MHz)
5. Stable system
It's unlikely, but that ,in my opinion, is the best you will do.
According to the stuff i looked up, your processor runs at 133mhz x 12.5 multiplier (133*12.5 = 1662.5 or ~1.67Ghz)
You should take some time to research the overclocking process.
The optimal overclock for your situation would be something like FSB speed set at 200MHz and multiplier set somewhere between 9 and 11.
The real key here is getting the Front Side Bus (FSB) speed to 200MHz. That is the maximum speed that your motherboard supports and it's also the speed of your new RAM. Now be warned that if you use your old ram that runs at 166MHz, ALL THE RAM will run at that speed and any overclocking you do will just be a waste of time. so just use the new RAM to get maximum performance.
Take you time doing this. ramp things up slowly thru the BIOS. Don't use a windows-based program to overclock.
A lot of the AMD processors have the multiplier "locked", so you may be limited to raising the FSB speed alone. (If this is the case you probably won't get the FSB speed to 200) 200*12.5= 2.5 GHz!--> Very unlikely, and probably won't boot at this speed.
Palomino processors run kinda hot, so watch those temps. If things get too hot, you're done going up. back things down a bit. I would recommend that you try not to exceed 55 degrees Celcius under full load.
Now i personally have not worried much about the Latency of the RAM. You should be able to adjust the timings, but a lot of times the system becomes unstable. Initially, set the RAM at the MFG's settings, do the overclock then you can play with timings if you want to.
Final note: Overclocking your system can damage the processor, so do your homework and read up on overclocking before you attempt this....