Overheating? Processor running at half speed?

I have an older socket 478 Asus motherboard and I've maxed the machine out with 2gb ram, sort of okay 128mb graphics card and now I've upgraded the processor to an Intel Pentium 4 3.4 ghz processor.

It was quite tough to get hold of a socket 478 processor - but I did find a reseller to said he had some.

They turned out to be unwanted processors from another batch of machines - so they were removed (or so the reseller said). So essentially I bought a used processor - but who cares, so long as it works eh?

I installed the processor myself, but almost immediately began experiencing overheating issues. Thought maybe I applied too much thermal paste.

So I thoroughly cleaned the top of the processor and the heat sink, applied about a pea-sized plop of paste in the middle of the processor and put it all back together. I assume you don't need to spread it all around and that the force of the contact tends to spread the paste evenly.

It still seems to be running too hot - Asus probe is moaning at me for running the processor anywhere from 60 to 67 degrees celsius.

So I downloaded the Intel Processor Identification utility to see what kind of processor it really and matched it to about five different possiblities. These processors seemed to max out at at up to 69 and higher to the low 70 degrees. If that is what they mean in the processor specs page that refers to the processor temerature.

So I thought that maybe these processors just run a bit hot . . . until I noticed that my processor, according to Intel's utility, is only running at 1.77ghz and 416 fsb (should be 800).

I've got quite a large thermal unit on the top of the processor and one additional fan on the front of the case which extracts air directly from the area around the processor fan.

Is the processor overheating? Could it just be a bad processor? Is the processor being sandbagged so as to avoid burning out?