I am sure that this has been ask and answered a lot, but here goes...

Is there a significant difference between types of thermal paste, and what is the best?

There is about a 1-8C differance between thermal pastes. Arctic silver 5 is the best thermal paste and is moderately priced.

Thanx F1N3ST, I thought that might be the case, but it is nice to have conformation.

No matter how smooth and flat the surface of the heatsink is, and no matter how smooth and flat the surface of the CPU is, there will always be tiny microscopic air pockets between two solid objects such as these. These air pockets can trap heat and impair heat transfer from the Processor to the HSF. Thermal paste fills in those gaps.

Thermal grease can just be this sort of sticky white...stuff..or it can contain silver, the latter of which will transfer heat a lot more effectively. As F1N3ST suggested, Arctic Silver 5 has silver in it (thus the name), and you will likely notice quite a substantial decrease in temperature when you get it.

That is the best definition you will ever get, sticky white stuff, thats all it is lol.