Zalman 7000 AlCu

Hmm, that should be a really good cooler, I had it on my 3800+ for a couple of years. Is the fan seated well on the processor? I have heard that thermal paste can take a little while to set, so it may stabilize after a while. Are you running the fan at full speed? Those temps don't sound too high, so no need to worry too much for now.

I've disabled the FanEQ and set the fan to full speed.

After seeing the problem I thought that maybe it's not tightened enough so I tightened the screw some more.

I know that the temperatures are o.k but I can't understand what's wrong. I'll wait and see if it's the thermal paste sets.

i would worry it will just be the the way the senser report, there low temps and thats a good OC youve goot their.

The maximum temperatures I've seen were very close to 70 C so it should be o.k right? (it never was 7x)

70 is a little high, but far from dangerous. I believe those P4s always ran hot, so I wouldn't worry. That zalman fan is a good fan, so it will provide adequate cooling. Does your case have good airflow? What are the ambient temps?

The case wasn't so good so I've drilled 120mm hole on the side and added a fan, so it's o.k now.

As for the room temperature is about 22-24 C

My friend has some Arctic Cooling MX-1, do you think I should try using it instead of the bundled one from Zalman?

Other temps are: HD0 32C; SYS 33C; PWM 43C;
Idle CPU is ~50

I wouldn't worry about it, if you have a good fan (which you do), any themal paste (again, you do), and good airflow (you now do), then I would say it is safe and your MB sensors are wrong. When you said temp jumped 10C, I had a feeling that the sensors may be bad. With a big HS like that, temp jumps should be in the 1-2C range. Even a hot processor can't heat a big block of metal that fast.

Of couse, you can try the other thermal paste just to see if you can lower the temps, but I doubt it will do anything.