I just rooted and overclocked today. What do you guys think is the best speed while still getting decent battery life?
No straight answer. It can and will vary greatly depending on multiple factors including which ROM and kernel(s) you use. It will also depend on the settings you use in SetCPU and of course how much time you actually 'use' your phone (and of course what you are doing). The more you use the phone the more dramatic the difference will be at higher settings. Also the governor setting will make a HUGE difference for certain people (again, dependent upon use). You'll have to play around and figure what works best for your uses.
You are right to be wary. There is much bullcrap. Be wary of me too, because I may be wrong. Make up your own mind after you evaluate all the evidence and the logic. - Mark Rippetoe
Running DroidMod 1.0 OC'd at 1Ghz... Gives me "ok" battery life which is still livable. Tried 1.2Ghz and it felt like you could actually watch the battery drain. I would say the sweet spot is somewhere in between 800Mhz-1Ghz....