Is heat the only limit to overclocking?

no. All Chips will simply not go faster than a certain speed, no matter how good the cooling is.

The best liquid Nitrogen cooled overclocks are still at well below zero when the limits are reached.

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"Sex without love is an empty experience...
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<A HREF="http://www.xtremesystems.org/forums/showthread.php?t=42655&page=1&pp=25" target="_new"> 6GHz Nitrogen Cooled P4 </A>

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A voltage signal in a CPU rises and falls, when it goes above a certain point it is registered as a 1. Below a certain point it is registered as a 0. As you increase the clock speed the signal has to rise and fall faster and faster. Eventually the signal is falling before it has time to rise high enough to be registered as a 1. SO no matter how cool the CPU is the voltage changes wont be registered.
 
Chips produce more errors as heat increases, and are more likely to lock up, therefore having your chip cooler allows you to get that last bit out of it.

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I don't completely understand. Are you saying this?:

"As the bus speed increases, te chip is no longer able to produce pulses fast enough to make a clear signal."