Yes, they work fine.
I have a dual XP system cranking away at home right now, been up for over four days.
Yes, you can use the fastest available. The CPU is multiplier locked, so as long as the motherboard supplies the correct FSB the CPU will be happy.
Words of advice:
Invest in quality fans (ie quiet). Fast does not have to equal noisy.
Don't be cheap with the power supply or memory.
Viper GTS <-- Loves his dualie AMD