Actually, it does matter how much thermal compound you use. You should apply enough to cover the top of the chips, but not enough to be squeezed out by the pressure of the heatsink clamps. This is vital, because too much thermal compound can cause problems due to the fact that it is conductive, and if it comes into contact with chips on the motherboard, you can end up with a $300 paperweight. Just recently, I repaired a RROD Xbox 360, that already had an attempted fix, but had thermal compound oozing out under the heatsinks, so doing it right is important.
Good mod for you to try for the PS3 Yellow Light of Death:
Carefully remove the low-quality original thermal paste and try a reputable brand like Arctic Silver. The thickness does not matter too much as long as the paste covers the entire contact area and makes good thermal contact.
You could also try changing the paste on the Emotion Chip.
There are many other things which cause the YLOD, so this suggestion may not help. It seems to work about 1 time in 4 from what I hear.
A lot of people on here are confusing "Thermal Pads" with "Thermal Paste", which are not even close to the same thing. One is a pad, the other is a paste.
Also, the PS3 and 360 are not even comparable, as the process is not the same. In theory yes, in process no. I find working on the PS3 more similar to a laptop, where the xbox is a little more easier to access like a desktop.
I myself, would like to purchase the Thermal "Pads" only, as I already have tools and a heat gun. I've only found one seller on eBay, but they sell one large pad you have to cut up and it's still $12.
NOTE: Also, unless you reball or reflow the PS3, replacing the Thermal pads and paste will not really matter.