The processor of the iPhone 3G is 600MHz, and the processor for the iPhone 3GS is 833MHz, but they are underclocked by Apple at 412MHz and 600MHz respectively. But a hacker discovered that you can overclock your iPhone in no time by simply renaming a file.
Companies regularly underclock products to save energy, reduce heat, and further the life of the processor. Overclocking may increase the operating temperature of your device (because it is harder for a phone to get rid of excessive amounts of heat without a dedicated cooling system), and thus may result in permanent damage to it.
Similarly, this is why laptops are rarely overclocked, especially without a laptop cooling stand. Overclocking may also decrease your short-term battery life due to more energy being used.