I'm an EE, we don't deal with heat... (At least theoretically)
hey, i'm an EE, and i deal with heat (although, that's because i build high-powered amplifiers)
but anyway, silver is the best heat/electricity conductor, then copper, gold, aluminium, etc.
(silver is best for heatsinks, but damn expensive, copper is barely far behind, and a lot cheaper, although Al is even cheaper, any oxidisation doesn't matter on heatsinks)
If anyone was wondering, the only reason gold is used for quality audio connectors, for example, is because silver and copper oxidize, gold is inert. And copper (at least, OFC) cables are the best, unless you want to waste your money on Silver cables (ie silveraudio.com)
ps, look here:
http://en.wikipedia.org/wiki/Thermal_conductivity#Some_typical_thermal_conductivities_.28k_values.29
and as everyone else said, the "paste"ness is to eliminate any tiny air-bubbles, and smooth out imperfections. Normal (non-AS5) heatsink paste is silicon-based, and conducts heat pretty poorly, but won't short-circuit anything when you get it everywhere...