Reguarding how much to increase...
<-- Here is a guide.
Above 1.52 Volts Intel states permanent damage will occur.
General conensus is, do not go higher than 1.45 volts if your keeping your processor overclocked 24/7. Even if your temps are good, too high voltage can damage the transistors in your processor over extended periods of time.
Going from stock (1.0 volts) to 1.3 volts should be a piece of cake on that heatsink. Somewhere between 1.3 volts and 1.45 volts, your heatsink won't be able to keep up with the heat comming off the processor. A little bit of voltage goes a long way. I would start at 1.3 volts, and increase it in baby steps 0.02 volts at a time until your overclock is stable.Where to increase?
You can increase the voltage in Windows (only on some motherboards) or in the BIOS.
It is considered a "good practive" to do your over-volting in the BIOS. You will get more options, and will be able to achieve higher overclocks if you do it through the BIOS. This is also safer than doing it in Windows.
You can get results quicker, and the options will be simplier to understand if you are over-volting using a ultility in Window. (You need a motherboard that comes with a utliity from the manufacturer to do this).
Please, just do everything 100% in one or the other. If you adjust some voltage settings in Windows, while adjusting other voltage settings in the BIOS can cause bad things happen. I learned this the hard way. :-/
The setting you are looking to increase is "VCC" or "VCORE".
Now, there is other settings (other than VCC) in the motherboard you can overvolt/undervolt to get a even higher overclock,...but this gets a little more advanced and these setting don't have nearly as big of an impact on how fast you can go. If you want to know more about these settings, read through the guide i linked you to or look through the stickied threads.
You should be able to get your "max" stable speed somewhere between 4.6 and 5 Ghz, and 1.3 to 1.45 volts. All depending on some luck, your processor, and your cooling.
I have a syche mugen 2, a 2500K, and i am at 4.7 GHz at 1.37 volts.