Best way I found to apply thermal paste to i7s is a vertical line down the middle. That way when the heatsink gets mounted, the paste is spread equally over all 4 cores (due to the core layout).
Are your fans drawing air in from outside the case, or blowing air out the case? If they're blowing air out, then you gotta think the radiator is having hot air from inside the case blowing through it, which isn't gonna be great for temps.
I've never used a Hxx cooler, so I can't really recommend setups.