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I'd try it with the Scythe first and see. It is a pretty good cooler and you could always buy a different one at that point if you don't like the performance of the Scythe.
I'd just try it out first and see.
I'd strip everything out that isn't necessary for the system to run. I'd only keep one stick of ram inside and memtest it, then the other. I'd take out the sound card and use onboard, just so you can eliminate the sound card as the problem. I know when I had a Creative sound card in a while...
Ditto. I've also upgraded to SP3, but only as a fresh install. Backup your files and upgrade via windows update and see if anything goes wrong. If so, you still have your SP3 disk mentioned above for a fresh install.