I recommend you clean it while it's in the socket. If you clean it outside the socket, it's easy to bent a pin and ruin the processor. Isopropyl Alcohol will dissolve the thermal paste, I find it easy to use a cotton swab (the kind that many people use to clean out their ears, even though they shouldn't use them).
Make sure that you don't get thermal paste on anything but the cpu/heatsink bottom. Chances are, it is both capacitive, and conductive. You could damage your motherboard if you get a small spec on it. When you begin dissolving the thermal paste with the alcohol, it may tend to drip. If it does get on anything clean 100% of it off.
A dry rag would not work well at all. Thermal paste tends to be a bit sticky. You need a liquid while cleaning. I recommend the alcohol because it evaporates, and usually takes the water with it. If you were to use plain water, it may work, but there could be small droplets of water in crevices on the motherboard. When you power the motherboard, these can cause shorts and damage the motherboard as well.
3.8 is pretty high with the AMD 6 core. I would go for the V6 to be sure that you can maintain decent temps.
Regarding the N520,
I googled a bit and didn't find any direct comparison. The general consensus was that the 212+ is better than the N520
You would likely be better off with the 212+ or the V6. The 212 does not come with that. My colleges internet doesn't like to load images, but it seems that the V6 uses a 4 pin PWM, along with a molex connector.
Edit: You should be able to find Isopropyl Alcohol at any drug store. It's commonly used to disinfect cuts.
It usually comes in a translucent bottle. It looks something like this:
http://www.first-aid-product.com/images/M/M313.jpg
Off-Topic: Expect spelling errors, no spell check on IE.