Do you have Vista? I'm pretty sure I remember you saying you did. That could the be issue since some people have good luck with it and others have not so good luck with it. If anything, try an old XP copy you have laying around and see what goes. As for overheating, I doubt it unless you're pushing harsh overclock settings on stock cooling. And if you think its Steam, uninstall it, play/use your computer without it for a few days and see if the problem persists. If it does, check out Steam's website and Google the problem and post back here.
That's about all I can think of right now. It's 4 pm and I just woke up with a headache.
EDIT: Steam just crashed my computer when I double clicked my TF2 icon. Didnt' even get to the "Preparing to launch" window. GG. BSOD'd me, but things only get quirky when I leave it on overnight or idling for long periods of time. Weird.