It's not really the fact that you have an outdated CPU, if you had a brand new one it would work a lot better. It's rather that used CPUs heat more. Yes that cooler does support your mobo (lga775).
Advices: 1# Use the mx-4 thermal compound, place only a bit of it, if you use too much it can no longer conduct heat. #2 Never save on coolers, it's better to buy one with a removable fan.
So if I place too much thermal compound, is it bad ? even if I spread it evenly ? And I also get a lot of blue screen errors. Does that happen because of CPU over heating or a hardware issue ?
I just had my OS changed to windows 10 if that makes any difference. But still windows crashes.