cdogg, I think you mean Palemino to thoroughbred, not the other way around.
Indur, I think you have fitted your heatsink 180degrees out (the wrong way around) or at least the heatsink is fouling something preventing proper square heatsink to core contact.
The heatsink will appear cool, it needs proper contact with the CPU for good heat transfer from core to heatsink base.
I really wouldn't advise using anything metal to clean a heatsink base, especially a razor blade, it's just not necessary! the old phase changing pad will come off 95% by just scraping with your finger nails and the other is easily removed with most solvents (apply to a cloth)
Pea sized amount of Artic silver III? I'd say thats between 5 and 10 times too much for a small XP core, it's only supposed to be the thinnest of layers.
An application amount about the size of between one and two grains of rice (prime the heatsink base first with a semi translucent layer) just in the centre of the heatink.
There is a very good application guide on the Artic Silver website:
Lastly: I have never seen a retail Athlon XP processor overheat when the stock cooler was fitted properly but lots when they havn't, sorry guys but the stock retail coolers properly fitted on an unclocked CPU are perfectly adequate, the most you will need to do is fit a couple of cheap 80mm case fans to have a fast reliable system.
PS. Some Nforce2 motherboards (Abit NF7S) for one do require a bios flash for correct temperature monitoring (don't know if this applies to the above users)
Martin
Replying helps further our knowledge, without comment leaves us wondering.