i assume he means something else, i'd just go with what nikawan said , clean the fans and get the dust cloggs out, then use tyhe little straw attachment on a can of wd40 and slowly trickle a very small amount into the bearings , then gently and slowly turn the fan (so as not to create large voltage)
once your sure the wd40 is evenly distributed, (and not dripping wet obviously) then reassemble ps3 , the fans should be a hell of a lot quieter, maybe not as quiete as a ps3 slim, but a lot quieter than they are now.
i've never dissasembled a phat , maybe the fan has to be detached from a heatsink or something, if so that would be where he means using thermal paste, maybe the heatsink and fan detaches from a chip. i've never opened a phat so no idea. if it does then yup your gonna ned that arctic silver.
its best not to remove any heatsinks unless absolutely neccessary. not getting it assembled right afterwards, or too much thermal paste can be fatal to your ps3.