I would not run Folding without a properly seated heatsink.
Your temps are way above my comfort zone for an overclocked CPU, let alone a stock clocked.
I keep my i7 920 max at 62C overclocked to 4.0GHZ. Full load.
The key is to use as LITTLE as possible. and keeping the base parallel to the CPU.
The paste is to compensate for imperfections, microscopic Divits etc....
so that heat can transfer into the heatsink & disapated into into fins, and blown out of the case.
It's not rocket science, But really important to research, and pull every degree of temp out of the CPU.
I personally use Arctic Silver Ceramique, and I recomend it due to it is NON-Conductive, And very effective.