I think the concensus is to use a short vertical line, not apply with a credit card. Below are some tips for people new to applying AS5.
The amount you need varies with the flatness of your HSF and CPU. If they are very flat (lapped), you will need only a small amount and it will spread. You might think too much won't hurt, but the problem is (as Soydios noted) that you can wind up with a layer of AS5 over the entire contact area which will hurt rather than help. You want to use the least amount that covers the core (do some searching to find a picture of the conroe with no IHS and you'll see how big it needs to be).
If you haven't lapped, you really have no idea how much you might need. It depends on how many and deep the gaps are between the two surfaces. You want the gaps filled with AS5 and NOT air! I recommend that people apply the amount they think is right, mount the HSF, run the computer for an hour, and then take it apart and inspect. If the spread looks good, you still have to clean it off and do it again (otherwise you'll get air bubbles). But if you have too much or too little, you can adjust.
I read that you should give you HSF a back and forth twist (just a few degrees) under moderate pressue when mounting on the CPU to grind the AS5 into the crevices and get good spread.
Getting the AS5 applied right can make a big difference in your temps, so it is well worth your time to try a few different times to try to get the best application you can.
Good luck!