I’d just like to re-iterate this. Thermal compound is a relatively poor thermal conductor, primarily used because it’s better than air. It’s designed to fill in the gap and the tiny surface imperfections between the HSF and CPU, and you want just enough to fill that.
There’s some more information here.
I also noticed my GPU temp was quite high (70C) when idling, then I looked up some stuff, and apparently the default fan speed for the ATI 4800 series is 25%, and you can increase it using an application called RivaTuner. I raised the fan speed to 38% and now my idle temperature is 42 C :).
You can control the fan strait from the Catalyst drivers in the overdrive section. I have my 4850 set to 100%. I still can’t hear it.