Am I frying my RAM???

I have G.SKILL 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400)

Specs say 1.9-2.0V, but I have it at 2.1V for a e4300 overclock (got it to 2.79ghz) setup on a DS3 board.

This is +0.3V. Standard cooling.

http://www.newegg.com/Product/Product.asp?Item=N82E16820231087

I damaged a 1 GB module of G. Skill by overvolting it (2.1 to 2.235) and leaving the system overclocked and running for weeks at a time. So yeah, overvolting the RAM can cause damage.
 
It really depends if you can hit the spec or not. Raising voltage should only raise your overclocking from the rated specs (although maybe nominally at +0.1). If you need to run them at 2.1v just to get that, you should contact the manufacture for warranty info.

It all depends on what you want to clock to. 2.79GHz is a decent system speed. But the relevant information needed here is where is the RAM being clocked to at those specs?

If you chose to run at 2.1v you should be fine. Anything over, make sure you're actively cooling your RAM.