Upgrade blues

Hi guys!

First time I have posted here, so let me give you a little background on the situation that got me to this point of utter UTTER confusion!

My wife has recently started playing EQ2. Her system wasn't up to playing it very well though, it was an xp1800+, 9700 PRO, A7N8X-VM/400, 512mb ddr266. So I decided to splash a little cash on it and grabbed an xp2800+ and 2 sticks of 512mb ddr400(generic).
The idea behind the ddr400 was that I wanted to OC the proccessor, unfortunately the above mentioned MB has THE worst bios I have ever seen, with no options for changing any settings at all! No FSB, vcore, vdimm, ram timings..nothing! But thats not my problem, just ranting a bit :P

Here is the deal. The system ran fine for a day or so, then programs started getting fatal errors, then blue screens, basically it just became very flakey.
The first thing I suspected was the ram. So I ran memtest and yeah, the screen filled with red within the first pass. I suspected that maybe the crappy ram I bought was taking an exception to being run in dual channel. There was no option to change to single channel in the bios (the board only has 2 mem slots) so I tested each stick on its own.
1st stick, errors. Hmm, is this the culprit?
2nd stick, errors. Hang on..is the slot screwed?
1st stick 2nd slot, errors. bah!
2nd stick 2nd slot, errors!!!
I put both of the new sticks in my rig(A64 3200+, A8N-SLI, 6600gt) ran them in dual channel and ran memtest. After 8 hours, not a single error...I guess that ruled out faulty ram.

Next I thought that maybe with all this new hardware installed that the PSU couldn't cope. So I took the antec 420W PSU out of my machine and tried it in hers. Tried all the tests again..same result!

So after all that I came to the conclusion that something must have happened to the motherboard? Even though it never had any problems with the old bits, maybe I damaged something when installing the new stuff.
Anyway, I wanted to be sure it was the motherboard before I went and spent even more money so I swapped out the only other new bit, the CPU. I put the old xp1800+ back in there, also put back both of the new sticks of ram and ran memtest again.

Ran overnight, solid as a rock....

So basically, what the hell is going on here? Do I have a dodgy CPU on my hands? can the MB not handle the new CPU? Even though the VM400 was released to support the 400FSB 3200+? What is happening to the system when I put the old CPU in there for it to be stable again?