This is how I read how to Apply Thermal Paste:
As mentioned before, I have over clocked to begin with and I am overly-obsessed with certain things, thermal paste being one of them, oddly enough so I've stressed out about finding that 'perfect' application for a long time. First, take a good-quality thermal paste, such as Arctic Silver-5. Place a small amount on the processor and carefully spread it over the entire heat-shield (on the processor, not the actual heat sink). The goal here is to make an even, thin layer, and the end result is no striations/lines. (You're done when you think you can barely see the heat-shield, but it might just be your eyes playing a trick - does that make sense?) My wife watched me spend 5 minutes one time making it perfect, so take your time with it. Now, re-seat the processor in the socket and lock it into place. Once it's in there, carefully put a BB-sized dab of additional thermal paste in the center of the processor. Gently place the heat sink over it and lock it into place very carefully. The pressure from it being locked will spread the BB-sized dab you placed evenly over the core of the Central Processing Units heat-shield.
Allow one week for the paste to cure.
Removing Thermal Paste
Start by removing the Central Processing Unit from the motherboard. Carefully scrape off as much thermal paste as you can with a credit card or razor blade from both the processor and heat sink. Next, take a lint-free cloth (coffee filters work great) and rub away any residue. Keep rubbing away until no more greyish-material is picked up by the filter/cloth. Now, take rubbing alcohol (higher-purity stuff works, too, but rubbing alcohol is fine if you already have it and don't want to buy the other stuff). Put a few drops of it on the filter/cloth and again, keep rubbing until no greyish-residue can be seen. Do this for both the processor and heat sink.