Please help-i7 heatsink

Too much can cause issues. Since it sounds like you caught this before putting the HSF on, you can clean it off with some rubbing alcohol and let it dry. Then just use the after market stuff that's already on the CPU.

If you didn't catch this, then you can clean off both parts and reapply the good stuff.

Theres some application info in this article that may help you.
http://benchmarkreviews.com/index. [...] &Itemid=62

I'd take the HSF off and clean it up. You can try it if you like, just use something like realtemp or hwmonitor to keep an eye on temps.

Did you notice any oozing out the side?

That's the correct way to put it on. Its just to fill the microscopic spaces where metal doesn't touch metal.

Just monitor the temps. If they are high, then theres too much and its not properly transferring the heat to the HSF. You know what to do if thats the case.

Ofcourse, you don't want to much thermal paste because its just meant to fill in the spaces to compensate for the uneven surfaces of the heatsink and the part it cools so more surfaces touches to get more heat dissipation. A tiny layer is all you need for it.