Failure would be catastrophic, yes, but the chances of that are insignificant, IMO. Nothings made perfect, but I haven't heard of a broken H50 yet, so that should be ok. HOWEVER, I also agree with #2. It's entry-level h2o, but if you want h2o, you should go all out. Otherwise, an air cooler can do just as well, if not better (e.g. Megahalem, VenX, etc.)
I've toyed with a 955BE on a rig, and I know it is not an easy overclocker (or I had a bad chip). AT has also had problems toying with the voltages and clocks of the processor past about 3.6 on stock volts and pushing to 3.8-3.9 <1.5v. I've managed to get 955 OCCT stable at 3.8, using a Mugen 2 with temps around 50c on load. With that said, I'll throw out my #1 heatsink recommendation. Get the Mugen 2

. It's enormous though, but that wasn't an issue. If you're not running any OC's, the Hyper 212+ would be the cheaper option, if you're not overclocking but still looking for aftermarket. The stock should cool non-OC chip just fine though. Those two are the best value, imo. Other ones would include CNPS10X series, NH-U12P, etc. I wouldn't go into high end (TRUE, Megahalem, NH-D14, etc).