I've never heard of thermal paste breaking down, but who knows what they were using back then (I assume we are talking about a stock cooler). As they say, it can't hurt to replace the paste and give the heatsink a good cleaning in the process. I have found that about 99.999% of the time it's actually dust getting in between the fins of the heatsink, and dust is not really all that good at heat conduction.

That is quite old... have you tried greasing the wooden donkey wheel?

I agree with dust being the major problem. However, if the computer doesn't just sit around, I've actually had the connection with the thermal paste go bad. I reapplied and my experienced must better temperature. Its also worth noting that the thermal paste had actually dried in most places. I had figured it was due to the constant moving (I take it to school daily) but the lappy was also 3 years old so it may go bad after time. Let us know if you see an improvement after reapplying : )