overclocking MAY damage the cpu ,by overclocking , you increase the frequency and voltage of the cpu , you may increase the frequency only , however it won't be stable , so you would end up increasing voltage also.
increasing the voltage will make the cpu drain higher current and will generate more heat , it is heat that mainly damages the cpu , anyway how hot will the phone get ? not much , using wifi or 3g will generate much much more heat than simply overclocking .

If you use power-kernel there are multiple voltage profiles to choose from , also someone here made a script to automatically change cpu voltage and frequency depending on the cpu temperature .

so the cpu gets damaged over time ?
no one can give you a certain answer.. however , as a fact electronic components have a really long life time (tens of years), if it's going to be reduced , it's no big deal , most probably you won't be using the n900 anymore after 2-3 years from now , that doesn't mean that it will stop working after 3 years , however it will become obsolete by that time , that you will want to replace it .

still, I have to say : do it at your own risk..