Just try overclocking it, it's very easy.
What motherboard are you using and do you have an aftermarket heatsink?. If your uncle does work at Intel then is this a retail CPU he gave you or some kind of test CPU?. Because if it's an engineering sample then i would go a head and just trade it.(ES CPU's could have a variety of things wrong with them or limit you overall) Download CPU-Z here:
http://www.cpuid.com/softwares/cpu-z.html for some info on your CPU and post it here so we can get an idea what you're using.
Keep in mind that ALL Core i7 models are the same, the only difference is clock speed and the Extreme Editions(like that 965 XE you have there) have unlocked multipliers which make it very easy to overclock. So there's really no reason to move down the latter on the i7's, especially if you don't want to overclock. There are a lot of experienced overclockers here that will help you get stated on overclocking that CPU, it's very simple. There is absolutely no point in trading or selling it for a lower i7 if your content with your 965, unless you are looking for more of a flexible overclock and you're not getting it with that 965, or the temps are just to high(you can check this using CoreTemp, SpeedFan..etc) or other issues. Then maybe drop down to a nice i7 920 D0 and overclock it.
I say overclock, it's super easy, especially with that unlocked multi of the XE. If you trade/sell that 965 for a lower model all you're doing is losing clock speed, so if you don't overclock you're actually losing out. Rather then what you could do is sell that 965, get some nice cash back, buy(or have your uncle give you) a nice i7 920. And use that cash from the 965 to get a solid aftermarket heatsink for some awesome overclocking. It's a win win situation.