Actually, the problem is that the on-board diode does not respond quickly enough to prevent damage (even if you cut the power) if you remove the HSF. This is what I remember reading about the AMD proc.
Also, the AMC proc cannot reduce heat enough to run without a HSF even if it drops the FSB. There are issues with dropping the FSB and so forth that aren't simple. I think that there are refresh issues with on-chip registers such that the CPU requires a minimum operating frequency.
The temp monitoring circuit is simple, though.
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