I'd like to point the people interested in overclocking to this about 10 minutes of discussion in IRC (starting at 22:18). The most interesting fact to me is that his two Ipod Videos behave differently.
Personally I wouldn't trust in it not damaging something, I was already a bit worried about a 1st generation Mini that had to run at the boosted CPU frequency of 75MHz (back then) all the time as long as frequency scaling didn't work correctly and had to be disabled for stability. The Ipod got really warm and the battery was eaten very quickly.
Well considering all that, still would be nice to have some form of overclocking available. Not extreme overclocking, but considering 30GB Ipod Video runs at 80 Hz, I don't think it would really be that dangerous to overclock it to 90MHz-95MHz. Also when I say overclock, I don't mean that it would run at constant 90MHz-95MHz, I mean that the ipod cpu will have the potential to get to that frequency if needed, however work at much lower frequency under normal circumstances to save power.
You have to admit that the idea of having things like the MPEG plugin run at more watchable frame rates on iPod Video would be pretty intriguing.
Also, about the heat and battery life issue... What if you increase the frequency by a bit (like to 90MHz) and keep the stock voltage? Is the supplied voltage the one listed for 100MHz CPUs? If so, the CPU might very well be stable at higher clock rates without increasing the voltage, which removes (or at least lowers considerably) the risk of damaging the hardware.
If the CPU does run unstable, you could risk damaging the OS, however that should not be a very major problem because it can be easily fixed by replacing the rockbox folder with a fresh one.