I would like to run Xfce, or any other GUI, as my desktop environment, but my RPi isn't powerful enough. I was wondering what damage overclocking will do to my board. I am considering it, but I don't want to destroy my board within a few months of buying it.
I've been running a Raspberry Pi computer over-clocked to the max (1 GHz) for a very long time (even with months at a time running 24/7). The old versions (with 256 MB of RAM) are not as stable while over-clocked as the newer versions are. But if you get some tiny heat-sinks (several sites sell them as a 3-part set with instructions - modmypi.com for instance) then you should have no issues.
Keep in mind that even over-clocked the RPi is still "slow" as a desktop. It is very usable but laggy and you will have to adjust your expectations if you're going to use it as a primary computer on a daily basis.
EDIT: I primarily use Raspbian with Xfce installed.
EDIT2: Another worthwhile consideration is power. A stable power supply is required and you should get one with an on/off switch. Removing power slowly (by wiggling a cable while disconnecting, for instance) is a good way to corrupt your SD card.
EDIT3: Fixed a typo.
This is a good reference for overclocking.
You are only really likely to damage your Pi if you run it at the max.