There are several ways that people do it, either spreading it themselves or allowing the pressure of the heatsink to spread it for them. I recommend you do what Arctic Silver suggest you do. The key is using just enough to fill in the microscopic pits in the surface of the machined metal, so as thin as possible.
i squirted some all along the cpu and spread it with my finger maybe a bad idea. im not sure if the heat sink is seated properly either, ifve fumbled with it a while..
Sounds like alittle to much, put about the amount of a little more than a grain of rice and spread it out thin on the CPU, its just to fill in the imperfections not as a layer between the two. Use a credit card or something flat to spread it.