How do I properly apply thermal compound to a heat sink?

put a small blob on the cpu. the cpu is the METAL thing on the chip, it is NOT the whole chip itself.  Smudge it a round a bit with your finger. (make sure you wash your finger well some of these products contain things you dont want in your mouth or eye, or even on your skin).

Then take a credit card or something straight.  I usually use the packaging the cpu came with the plastic stuff, then smear it very thinly over the cpu.  Just enough where you can kinda make out the writing on the cpu die.

The purpose of the compound is to fill in the tiny microscopic fractures that are in the metal. There for making a better heat transfer point to the heat sync.  If you goop it on there the metal wont even touch giving you bad heat transfer.

Actually, the proper application method depends on the CPU and on the type of thermal compound you're using.

First, as noted above, clean all of the old thermal compound off both the CPU and the heatsink.   The best way to do this is to first scape most of it off with a credit card.   Then use a clean cloth with a bit of Isopropyl alcohol (rubbing alcohol) to clean the rest off.

Once it's clean, how to best apply the compound depends on what compound you're using and what kind of CPU you have.   On your Dimension 2300, you have a single core Pentium IV, so the actual processing core is in the very center of the chip.   With that CPU I'd use the process described for Artic Silver 5 (one of the best thermal compounds) and simply apply a small "BB-size" dab of compound in the center of the CPU;  then set the heatsink on top and very slightly rotate it a couple degrees both clockwise and counter-clockwise (to "smudge" the compund); and then mount the heatsink tightly.

Note that for other kinds of CPU's (dual core or quad core) the suggested methods are a bit different -- because the actual cores are no longer in the center of the CPU die.

If you haven't yet purchased your thermal compound, Artic Silver 5 would be an excellent choice -- although their instructions are an excellent guideline for any non-adhesive thermal compound.   Here's a link to their guides if you're interested:  http://www.arcticsilver.com/ins_route_step2intelas5.html

One word of caution, do not over apply the compound where it can seep out and get on your motherboard. If it makes contact with the wrong component(s) it could short out your entire board which would require purchasing a new motherboard.

First, clean that CPU heat spreader and the bottom of the heat sink base with a strong solvent.  I use a product called Goof Off, which can pretty much remove paint or degrease an engine.  It's strong stuff.

Then, I use denatured alcohol to remove the Goof Off residue.  Denatured alcohol is basically 100% pure methanol.

Once both sides are clean, then apply some thermal grease (a small dab) to the processor die and spread it out evenly with the edge of a credit card or something similar.  I use Arctic Silver personally.  Anyway, make sure you have a nice, even coat with no voids or bubbles in it.  Then, place the heat sink over the top, center it up, and peg it down.

Once you get the machine back up and running, download a stress tester and a CPU temperature monitor (I recommend Prime95 and HWmonitor (www.mersenne.org and www.cpuid.com respectively).  Fire up HWMonitor and then run Prime95's torture test.  Make sure HWMonitor does not report the CPU going higher than 70-75 degrees C.  Anything hotter than that, and there's a problem.