I'm using Radeon Tweaker as my overclocking program, and it runs at 189 all day long. I never did the BIOS flash trick; I just used this program. As far as my settings go, I just chose whatever Radeon Tweaker "recommended". If you don't have it, download and install it. It has probably 50-70 settings, and gives a "recommended" setting for each one.
Now, as far as DII LOD goes, I am currently running Direct3D and the very sweet 800 x 600 resolution. I haven't even tried running it in DirectDraw mode.
I WILL say that I noticed this. I was previously running my Duron 750 -> 950. When I was at this speed, everything was perfect. Now, however, I'm running at 850 (slapped an 80mm onto my PAL6035 to cut down on the noise). I run about 2-4C warmer, but it's quieter. What I DO notice is that if I turn on the MAP in D2 LOD, I can barely notice that it is getting choppy. As soon as I turn off the map, it runs perfectly, even with a screen full of 20-30 monsters.