I have installed Notebook Hardware Control, undervolted it, and switch graphic to low speed. During standard tasks ( internet, office ) fan is usually off. Before this I had the same problem.
It depends on DDR or DDR2 ( this you can see in CPU Info software or by last digits in your serial number). When you are about download BIOS update, there is description which one is for which machine.
I have installed fresh Windows XP on my machine, adding only required drivers. None of Acer tools are installed and everything works fine. To control processor clock I undervolted it using Notebook Hardware Control - it is perfect.
Have you tried switch on pressing F12 to have boot menu , and wait if
anything goes wrong. Or start any Linux Live CD to check if there is software or hardware issue.