Applying thermal grease: Manual spread or the rice grain method?

The problem with spreading it beforehand is this:

You are almost guaranteed to use too much compound. By the time you smear it around the CPU and are comfortable with it covering the entire surface, you've already likely used too much. Thermal compound is meant to fill in the imperfections in the metal surfaces of the CPU cover and the heatsink itself. It is not meant to be a barrier between those two surfaces. In fact, when it is thick enough to become a barrier, it actually hinders the heatsink's heat-pulling ability noticeably. If you can see a full coating of compound when you spread it around, you've used too much. And if you use a business card to wipe it down to a thin film, you've probably used too little.

What I do is apply a rice grain sized lump of compound. I then push the heatsink in to place and apply a bit of pressure, without tightening the screws. Then I remove the heatsink and check to see that the amount that I applied covered everything sufficiently. Finally I wipe it all down with a cloth and alcohol and reapply the compound, making sure to apply exactly as much as I did before. Really, compound isn't so expensive that you can't take this extra step to ensure you used exactly enough.

I have done both in my years of building computers and I can't say that I've ever REALLY noticed that much of a difference.

Be sure there is not pre-applied thermal grease ;)

spread with business card or something similar..

I've never seen reason why you should just hope it spreads perfectly when you can help it...

http://www.innovationcooling.com/applicationinstructions.htm

AS5 is old stuff, made back in single-core CPU days (not saying it's a bad TIM; quite the opposite). With the advent of multi-core CPU's where the physical cores may not be in the exact center of the die, I would imagine spreading the TIM over the entire CPU is a better idea nowadays.

I've always gone with the spread method. This way I can see the grease is already covering the entire area. The only thing I can think of with the other method is not evenly applying pressure with the heatsink (uneven spread of grease) or you don't put enough grease on in the first place.