About a year ago I equipped my Acer 5920g laptop with an NVIDIA GeForce 9650M GT, and it's worked pretty good until up about three weeks ago when I installed Windows 7 32-bit (I used to run Vista 32-bit, but I'd heard 7 was vastly superior so I decided to upgrade.), but now it's started overheating a lot, idle temperature is between 53-59 degrees celcius and when it's running games it goes up to 100-110 or more. The computer is well ventilated, I've got a cooling pad and there's a thin layer of thermal paste on the GPU and DDRs (I apologise for not knowing what things are called). The CPU doesn't appear to be the problem, nor does the RAM, I've tried both newer drivers and older ones that I know have worked well for me in the past.
To quote where you wrote,
"there's a thin layer of thermal paste on the GPU",
you will need to apply more.
The gap between the GPU core and the heatsink is far too wide for just a thin coat of thermal paste.
You will need to purchase a copper shim, or plate to fit in between. You will need a plate about 0.6-0.7mm thick. 0.7 is readily available on ebay. Apply the thin coat of thermal paste to each side of the copper plate and seat it between the GPU core and the heatsink. It will work perfectly.