DDR:
Dual Data Rate.

DDR2-1066 divides into 2: 533MHz.
Nothing is wrong with your system.

When you put on auto, offcourse it'll run at PC2-6400 DDR2-800.
Buy any PC2-8500 DDR2 1066, if you don't change the straps, all of them will run at DDR2-800.

You have to change the straps by yourself.
So again, nothing is wrong with your system, nothing is wrong with your ram.

Main problem that's causing the northbridge go as hot as you've said earlier is because the heatpipe heatsink that is covering your motherboard uses thermal pad which is rather useless compared to thermal paste.
The stock thermal pad has only 50% the power of passing the heat to the heatsink [compared to thermal paste], thus, your northbridge go as hot as you said just now.

You can change the heatsinks but it's gonna cost you a lot.
One thing you could do now is first take out the heatpipe heatsink, remove the thermal pad then use thermal paste at all the place that is covered by the heatpiped heatsink. This will help a lot in removing the heat.

I've done this a lot of time on my various motherboard that uses the heatpipe heatsink that covered the motherboard and it's proven to be working a lot better compared to when it's on the stock thermal pad.

No.
It won't void the warranty.
I've done this thing many many times before and RMA'ed some of them, no problem in claiming warranty on them.

You just have to take out the heatpiped heatsink carefully without leaving traces that you've taken out the heatsink.
Do it properly.

And please don't use an al-cheapo thermal paste like those white ceramic thermal paste.
For the best result, use either Arctic Silver 5 or Arctic Cooling MX-2 or Tuniq TX2.

For those heatpipe heatsink that is attach on the motherboard, you don't need to do that since it's on thermal pad.

Either the same or lower than the CPU.