Originally posted by troberts
What is the purpose of the thermal paste? Does the paste get put over the hottest part of the processor so the heat is dissipated, or does the paste absorb heat, but does not get hot?
Whilst a chip surface and metal surface look totally smooth to the naked eye, on a microscopic level they look more like mountain ranges. This means that when you bring them together, there will only be a few places where you actually get chip->metal contact. The rest of the surface area is chip->air->metal.
Air is a pretty good insulator when compared to copper. The idea of thermal paste is to replace the air gaps with paste, which is a much better conductor of heat than air, but still a lot worse than copper.
When trying to remove heat (which is energy) from a CPU die, you need to minimise the thermal resistance between it and the place you are trying to move the heat energy to (in this case, the ambient air). The higher the resistance, the higher the die temperature will rise. There is a small thermal resistance between the die and the topside of the chip, but there is a large thermal resistance between the topside of the chip and the ambient air (it cannot dissipate heat well to the atmosphere). So, you need to mate the top of the chip to something that has a low thermal resistance to ambient air: a heatsink. You want to minimise the thermal resistance between the topside of the chip and the heatsink. Using no thermal paste will introduce a thermal resistance due to the air, which can be reduced if the air is replaced with paste. Use too much paste, however, and not only have you replaced the air with paste, you've also separated the points that used to closely touch with paste. There's also the possibility, if the paste doesn't spread evenly, that areas of chip and metal that used to be in proximity are not anymore. Finally, when the paste spills over the side, you have reduced the thermal resistance to other parts of the chip, enabling heat to flow more easily than before to those areas (which you don't want it to do - you want it all flowing to the heatsink). It would be easier to explain with a picture, but it would take me ages to knock one up. Hope you get the gist of it.
See also this thread
You may also want to read this wikipedia entry
and the associated topics.