it will hinder it in that it will drive you nuts as the mulitplier and FSB will constantly change, and do it so fast you have a difficult time knowing what you actually got on your OC. It will kick in well before the cpu is running at full load, so yes, it gets in the way.
The C2D will themal trip at 85C (or close) regardless of any bios settings to save its own life. The TM2 Thermal Monitoring 2 will kick in only when the chip is about to overheat as does not normally affect the processor until it is way to hot anyway.
I recommend disable EIST and C1E, enable TM2 and you are well covered, you cant hurt the processor. After you get the OC established and you dont game constantly enable EIST just to make the core run cooler when you are not gaming. If you walk in and plan a big gaming session just jump into the bios on boot and turn it off.
Wish someone would make a utility we could use to toggle EIST while in windows.