The purpose of TIM is to fill the gap between the IHS (the metal part at the top of the CPU) and the base of the cooler. At best there are microscopic gaps between the IHS and cooler. At worst, they are barely touching. The thermal paste makes sure the heat can transfer evenly from the CPU to the cooler.
Make sure to clean off all the old thermal paste before applying new stuff. You can use a napkin or strong paper towel (ones that won't leave fibers) and rubbing alcohol. Don't use water. When applying paste, put a dot slightly bigger than a pea right in the center of the CPU. It should give pretty even distribution that way.