To increase the thermal conduction efficiency between the processor's die (in this case, the small black square in the centre of an AMD Athlon XP processor), and the surface of the heatsink, thermal paste (thermal compound) or thermal pads are used. With this particular processor, the thermal compound is applied just to the central die.
Note well that AMD does not recommend the use of thermal pads with its current Athlon 64 and Opteron processors. This Q&A on this site deals with the subject: Which is the best cooling solution between the processor and its heatsink and fan, thermal paste or thermal pads?
With current high-speed processors, it is advisable to use only high-quality thermal paste instead of high-quality thermal pads. In any case, cheap, low-quality products should never be used.
For Pentium 4 and Athlon 64 processors, which have a covered upper surface, spread the paste thinly over the entire surface by squeezing a bit out and then spreading it evenly across the surface with an old credit/store card or similar implement.
When using thermal paste, care should be taken not to apply it too thickly. The paste should only expel the air from the interface between the cooler and the die. Using more paste than say an amount equivalent to two or three grains of rice usually reduces thermal conductivity instead of increasing it. Practical tests of the various pastes have shown that the temperature of the processor's die can be reduced by up to three or four degrees Celsius by using a high-quality thermal paste.
The application of the pre-assembled pads is quite simple - you remove the protective film from the pad, place the pad between the processor and cooling unit, finish fitting the cooler, and then turn the computer on.
A thermal pad can only be used once. It leaves sticky residues that are not easy to remove from the contact surfaces. Thermal paste is easier to remove, therefore, those of you who regularly change the processor are advised to use it instead of a pad.
You can use the Google search box at the top of this page to find sites that provide information on how to apply and remove thermal paste and the sticky residue left by thermal pads.
The search term clean + "thermal compound" + processor lead me to this useful site
