okay - basic principals of watercooling.
You have a 'block' clamped to your cpu, instead of your heatsink. The 'block' has an inlet and an oultlet.
Pipes attached to the block bring water in, then carry it away. If you can imagine a circuit diagram or flowchart you have in total:
cpu water block -> pump -> radiator -> cpu block
there are options for for a reservoir too, which can hold water to give your system greater volume capacity.
The general pricipal is this, water passes through the water block, and becomes heated by your cpu, which is in contact with the block, in the same way your heatsink is right now. The hotter water is carried away by the pump into the radiator, this being equivalent to the radiator in a car. It carries the water through a series of pipes to cool down again - usually with the help of fans (but larger, slower ones than your FOP38 that sound a lot quieter) this now cooler water returns to your cpu block to repeat the process.
It is generally easier/better to have the radiator located outside the case, that way your cpu temp does not contribute to your system temp and you avoid the need for multiple large fans in your case too.
Check out this section and other forums for watercooling advice in more detail.
-* This Space For Rent *-
email for application details