From what I seen, it basically looks like you take off the nickel part (silver) off it till you get to the copper. You basically eye the silver edges till it disappears since it has like a concaved effect when your rubbing away.
Using glass as a surface, that should help insure its getting flat, as the nickle part of it is scratched/rubbed away.
I think you have to take off more than the nickel coating. The IHS is nickel plated thus should be really really thin. The difference between the low and high in a concaved IHS can be as much as 1-2MM. Nickel is there to prevent\slow down the oxidation process.
Only if it's too hot. Yours isn't at 40C. Suppose you were trying to o'c the heck out of it and were hitting low-60C temp range, THEN it might help (or it might hurt, if after lapping it isn't as flat as it started out, the result will be worse than not lapping. No heat spreader is perfect but they're a lot better than they used to be (early PII and Celeron Deschutes era).
If so, how do u know how much to take off?
A) Till it's flat.
B) If your heatsink is very very good, continue removing material until there is minimal heat spreader left so there is closer CPU - superior-heatsink junction. I advise against this option B) since you didn't know already and are then obviously not experienced at lapping, and frankly such extremes aren't necessary as the benefit is too slight compared to any other effort to improve cooling (like better heatsink or sink tech like water, peltier, or phase change methods).
temps via core temp are high 40's Deg C at load
It's just wierd that you are looking to solve a problem that you don't have. Why do so many people mistakenly think cooler is necessarily better? It would be like specially plating the transmission case on a car so it lasted 100 years instead of 60 when the car is going to be junked before it's 30.
I am in Aust, so it is just about winter, so summer temps will be higher. Temps a couple of mths ago were mid to high 5o's at load w/out side fan
Ah, now I see. Wait till then to see what final temp is. At stock speed you should be able to keep stability at 60C or a little higher. Worry about parts that aren't as tolerant of running hot because they don't have a bigger heatsink like hard drives or capacitors, and before the peak hot season clean the dust out of everything.
hs cooler is Asus silent knight
gigabyte 3d aurora case w 80mm side fan ( just installed ) & 2 x 120mm rear fans
Unless your rear 120mm fans are mostly blocked by stamped-out sheet metal grillwork (I am not familiar with that case) you should have plenty of margin with a pair of those fans, unless your front passive intake isn't a large enough opening, in which case you should look at expanding that opening some. There is no cause for it yet though, wait and see if temps get too high.