are you using the win2k box as a router/ip forwarding??
if so, your other pc's on your "network" are going through it, results in drop in performance,,
you havent provided many details of your setup, so I am going to go on this thought,,, plus how much ram do you have in it, if you are using this machine as the "conduit" to the internet, then jack up the ram win2k is a hog! further,, check out your pagefile, if you can try your pagefile at 2.5 x's the ram,,then decrease to where you see the best performance,, if possible ,, add a second drive to the machine,,just a small one, to act as the pagefile drive,, taking the swap file off the boot partition will also improve perfomance,,
O/C'ing is great!! shoot for about 20-30% of your chip speed as AZip stated,, get the specs on your MOBO,, and away you go!
Further,,if you are having problems with the network dropping, have you possibly lost sync with your ISP? I know that in canada ROGER'S is terrible for having to call to reset NIC'S
anyhow,, if it is any help, I ran win2k pro on an old P166 o/c'd to 200 with 128 mb of ram,, the thing ran smooth and stable!!
your machine shouldnt have an issue to be able to handle win2k ,, just make sure your ram is UP there!
TO AZIP,, what chip are you running at that O/C setting,, I have a northwood,,2.0 and have seen that clocking it to 2.5 is no issue,,
but i am always looking for something new,,,,