Exactly which hsf did you get? The ones I have used were very straight forward as to installation. I usually install them so the wires point toward where I want then to go. Look at your clips that reach from the heat sink, to the motherboard. You know, the slots in the heat sink clip line up with the tangs on the base for the cpu. Pick which way you want to place it, as it can only go two ways on most mobos, 180 deg. As long as it clears everything on all sides and sits squarly, you should be fine.
As for the gray stuff, I don't know. I use a silver compound in a tube, and use just a tad. A tad is less than a smidgen, and a smidgen is less than a scoshe, so you see I don't use much.
Clean the bottom of the heat sink thouroughly, place a tad on the cpu, place them together. Engage the clip on one side while holding it in place with your fingers, then push the clip down and in to lock into the base around the cpu. Oh, don't use the wrong pusher down tool and gouge the mobo when you slip. I have a narrow, around 3/8 inch, screwdriver that fits right into the pusher down notch. A narrower one will work, but, you don't want it to slip out and gouge. Usually, clip the non pusher side towards the power supply, and use the push down notch side toward the ram, but it is your choice.
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