This is the chip you want
http://www.excaliberpc.com/product_info.php?cPath=178_186&products_id=1926AMD Athlon XP1700+ 1.47GHZ 384K 266 Tbred (TRAY)(JIUHB:0310WPMW)
and yes you put the AS3 directly on the cpu and nowhere else, most people gob it on and the actually is detremental to keeping the temps low. I put a small gob on it maybe the size of this... 0.... really small amount then use a flat surface to spread it out evenly, I have used a matchbook cover with success. But for a REALLY good step by step on appyling it go here
http://www.arcticsilver.com/arctic_silver_instructions.htmAlso make sure you get a real good heatsink, pretty much everyone uses thermaltake, I have an AX7 but they are discontinued as have been replace by the SLK line. thermaltake slk-800 heatsink is a good one,but a tad pricey the sk7 is good as well. Then your gonna want an 80MM case fan the vantec tornadoe's are very nice but are loud, the panaflo's are good as well as the sunons. I have a panaflo and it isnt to loud. With the panaflo's you need to get a "tail" which allows you to plug it into the motherboard for monitoring, or you can just use it the way it comes and plug it into the power supply. I would go with the Sunon's as they tend to be quiter while have a higher output. With that heatsink and fan combo CPU temps should not be an issue with overclocking it. The nice thing about that processor is that it runs at a default 1.5V which is nice as it keeps the temps down a tad. Rumor has it that the processors were actually MobileXP processors that didnt quite hit the Ghz they wanted them to, some people say that they are "downgraded" XP2800's, I have no idea but all I know is that EVERYONE that has bought one of those chips has hit AT LEAST 2Ghz, like I said before 2.2-2.4 is the average and some guys have hit over 3Ghz (with water cooling of course). A $72 chip overclocks at least 800mhz is a damn fine deal.
This is a good place to buy from as they are VERY highly rated on resellerratings.com
http://www.frozencpu.com/cgi-bin/frozencpu/scan/se=CPU%20Cooling/se=Thermalright/mp=menu_search.html