I use
Prime95's 'Blend' mode to stress-test the CPU and RAM after each step up during an overclock.
If your system's got a serious stability issue (which is quite likely if you've increased your CPU multiplier and no voltages), chances are good you'll get a BSOD within the first 5 minutes, which will most likely be caused by insufficient CPU voltage or by your northbridge being unable to handle the increased data processing rate from the CPU.
At that point, you should look into the possibility of raising your CPU voltage or stepping up your northbridge frequency and voltage a little until P95 runs for at least 2-3 hours with no errors or BSOD's. That's the minimum time to consider the system stable for everyday use. If you want it as stable as can be, leave the test running overnight (8+ hours). If you get no errors after that length of time, it's probably as stable as it's going to get.
In answer to your second question, the long-term effect of a substantial overclock is shorter overall component life, but chances are you'll be looking at getting a new one by the time it fails. Think of a candle: The harder you burn it, the shorter it lasts!
Carefully watch your temps and supplement my advice with your own research, particularly into RAM and NB frequencies; I'm by no means an expert!