HP ML350 G4 – do the XEON processors need heat sink compound

When you have to replace compound on an existing cooler, a common problem is, that the compound ends up sticking the heatsink to the processor, making it difficult to remove the cooler. You could use a hairdryer to heat the heatsink a little, in order to melt the thermal compound and then remove the heatsink moving it slightly in a lateral way. But I wouldn't use the hairdryer too long.

To remove the rest of the old compond, use a cotton swab with isopropyl alcohol. It is alcohol that doesn't contain water. Use a utility knife to eliminate the last rests of the remaining substance, but be careful not to scratch the surface.

It is a common misconception that the more thermal compound is applied, the better. Too much grease can be insulating spoiling the correct heat dissipation, and worse: that grease could end up dropping on motherboard contacts. Normally they don't conduct electricity, but there are compounds with some metal, they will work as conductors, which could lead to a short circuit and destroy your motherboard.

To apply the new compound, again use a cotton swab. Don't put too much of the substance on the processor. You don't necessarily have to cover the whole area of the processor, because the pressure of the cooler will do that for you. How to apply the cooler will depend on the model of processor/cooler you will use. Do it carefully.

My understanding is that the "stepping" designators in a specific product line are for denoting minor revisions in the silicon. As they increment the feature set of a specific processor, they increment the stepping number. In the case of the processor you're looking at, it looks like the major difference between C0 and E0 is the max clock rate: 3.00 GHz vs. 3.33 GHz.

Am I going to see a difference between a C0 and E0 stepping in a MySQL DB server (32 GB RAM if it matters)?

Perhaps incremental performance improvements with the E0, but nothing significant.

Am I missing out on any critical functionality? Will it compromise the reliability of my production environment?

Nope, core functionality should be the same between different stepping revisions of the came product.

Is this totally worth it? (yes, subjective, but just this! :)

It's probably not worth spending too much time on.