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What is a...

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A peltier is a device that moves(not 100%sure how) heat from one side of the pelt to the other. Then you use a HSF or a water cooling set up to move the heat away from the pelt. You may need it depending on your temps or if you want your computer to run really cool. You may need a radiator if you use water cooling to move the heat away :)
I have 750 Duron O/C'ed to 945. :-( Do you think that I will need the radiator?
For watercooling, yes. It's not absolutely necessary, but it's required to cool the water. Another method would be the Bong Cooler
In my experience a peltier is only needed with a water cooling setup, and then it is probably more badass than useful. For a air-cooled rig, it can be instant death as it will overload all but the most burly heatsinks, with the CPU's heat AND the pelt's own waste heat.

My advice: buy one. Play with it. Read up a LOT and be careful with it. The people with condenstaion problems aren't laughing.
you will have to have a radiator for water cooling, even without a pelt. The chips simply heat the water up too much.