If the fan is indeed broken, that would account for high CPU temps and cause thermal shutdown. Truly, the only 'cure' for a broken fan is to replace it.
If the fan is working as designed, it should automatically increase in speed from a nearly inaudible 2000 rpm 'idle' up to a fairly loud 6000 rpm when the CPU and/or GPU are working hard and producing lots of internal heat. Using smcfancontrol to artificially lower the speed of a fan that is working as designed is not going to 'solve' a cooling problem.
From other discussion threads on the topic, Intel CPUs are designed for reliable operation up to 100-degrees Celsius (212-degrees Fahrenheit) operation, so 150 is not an unreasonable temperature. At 100 Celsius, there is thermal shutdown protection built in that should trigger.
Watching videos on YouTube created with Adobe Flash in Safari causes the CPU to work hard. Secure Emptying the Trash causes the CPU to work hard. Editing large graphics, photos, and video editing cause high CPU usage. Lately, I've noticed that even Twitter can cause high CPU usage in Safari. Firefox and Chrome seem to be a bit less CPU intensive for some websites.
I have an older MacBook 2,1 (mid-2007) with the T7400 Core2Duo CPU and Intel GMA 950 graphics, an combination that produces lots of heat. My CPU often reaches 150 Fahreneit and even 175 upon occasion when I'm first start doing one of the activities mentioned above. Then the fan speeds up, and maintains the temperature at around 150 or so, even when CPU activity remains high for several hours.
If the fan is working properly, it is possible that an accumulation of dirt and dust have reduced the efficiency of the fan, and a good internal cleaning might help.
If the heat on your legs bothers you, use a phonebook between legs and computer or purchase a passive notebook cooler pad. I won't suggest a laptop pad containing a fan because of the added power drain when you're not plugged in to an outlet.
