Overclocking beyond the manufacturers spec is a problem.
But the manufacturers have said that as long as the temp doesn't get too high, these clock rates are safe.
At that point, what's the difference between "overclocking" and the "turbo mode" that the latest Intel chips have where they can shut down some cores to run other cores at a higher clock rate and still keep within the thermal limits?
XBian mildly overclocks the pi in this safe, manufacturer approved way, and is significantly snappier than raspbmc.
That said, even Raspbmc is not significantly less responsive than my DVR when navigating around. I haven't tried doing so while a video is playing.