I have my RPi at 1Ghz and the PSX emulation runs well. I think 900mhz is the minimum for getting decent speed with PSX emulation. Your safest bet for overclocking is setting it via raspi-config.
Like Walnut. After overclocking to turbo mode via the raspi-config command (without affecting your warranty) PSX emulation works well. I've tested Crash Team Racing and Tekken 3.