First Time Installing New Cooler, Help! (pictures)

Well, thanks to the diagnosis of the people here, I was able to catch my the dying fan on my old Radeon 9700 Pro before it was too late. It's been getting worse, I've had to shut the machine down a couple of times because I started to notice some artifacting while playing Oblivion, but nothing too serious. Anyway, the replacement fan came today, but installing it is turning out to be more than I bargined for.

First off, I can't get the old fan to let go of the slot on the board that provides it with power. I think I'm on the verge of ripping the female connecter off of the PCB (or i'm just freaking out). Any suggestions on how to facilitate it's safe removal?

Next Problem. Do I keep the old heat sink? It's a pretty decent looking one I think. Lots of surface area, far more than attaching just the fan would provide. However, I face a few issues with this. I can remove the fan from the pink housing, and I'm left with a unit that just barely won't drop into the slot. The radius of the screw holes from the fan on the new fan is too small to fit, so there is no chance of attaching it that way.

I idea I had was that I could take a knife/file/other tool. and simply cut off the offending plastic pieces, allowing me to drop the fan into the slot, then directly attach the fan to the heatsink with either the provided rubber sticker, thermal tape, or the thermal paste. (thermal paste is an adhesive right? or is it just a conductive goo?)

If I discard the existing heat sink. I'm going to want to mount the new fan directly onto the chip right? The pink housing is susposed to be its own heatsink right? That's why it's completely smooth on the back? I'd have done this already, except I can't figure out how to remove the existing sink. It's held to the PCB by what appears to be two pins that go through the PCB and expand on the other side. There are springs on the pins that I believe are present in order to further hold the thing together. Now, when I attempted to crush the pins back down to size to push them back through the PCB, nothing happened. They didn't compress at all. Do I just need to use more force or something? Could five years of being like that just made them really stiff?

And once I get that off, how do I remove it from the chip? Will it just come off? or will I have to try to unstick it from the chip? What do I use to take off the old thermal paste?

Another problem I'm facing is the power connector. For some strange reason, it has 3 prongs... but there's only wires in two of them. I COULD use the adapter that came with it and hook it up to other power line, or I was thinking of using part of the connector on the old fan and making it into a two prong unit. Then again... I'd probably be better off hooking it to the power supply.

Anyway, here are some pictures. Any help is greatly appreciated. Thanks guys!