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Putting on too small an amount of thermal paste will increase heat. Putting on too large an amount will make it spill onto the motherboard, which *can* be bad if the stuff is conductive (newer types of Arctic Silver are not).
You just need to remember that only the center of the Athlon64 needs to be covered with thermal paste for it to work - the sides don't really get that hot. In my experience with Coolermaster thermal paste, you just put on a bit (2 or 3 grains of rice at most), then put the cooler on, twisting it around a bit to force out the air. That usually is good enough to spread the thermal paste. I'm not sure about Arctic Silver, but I suppost it works pretty much the same - could be wrong, though.
By the way, I assume you'll be putting on a non-standard heatsink? All AMD coolers come with thermal grease pre-attached. That doesn't cool as well as Arctic Silver (or coolermaster), but it does the trick.
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