What are the limits of the speech and action referred to in the Hadith: "Indeed, Allah has overlooked for my Ummah what they speak to themselves about, so long as they do not act upon it or speak of it"?

It is from Allah Almighty's mercy upon His servants that He does not hold them accountable merely for internal thoughts and evil whispers unless they settle in the heart. As for the speech for which a servant is held accountable, it is what his tongue utters.

However, what settles in the heart and is firmly resolved upon by a person, he is held accountable for it, because waswasa (whispering of evil thoughts) is of two types: essential, which is what initially crosses one's mind and is excused; and voluntary, which continues in the heart and one acts upon it and derives pleasure from it. This (the latter) Allah has specifically excused for this Ummah, like loving a woman, for instance.

Qadi Abu Bakr Al-Baqillani holds that whoever resolves to commit a sin and persists in it is sinful in his belief and resolve. He differentiates between an intention (or passing thought) for which one is not held accountable, which refers to thoughts that do not settle in the soul, and a firm resolve for which one is held accountable. Scholars have agreed on the prohibition of envy, belittling Muslims, wishing harm upon them, and other such acts of the heart, as well as resolving upon them.