[KnightElite]

It depends on how you set up the graphite. For a waterblock, it would not be very useful though, since graphite can only conduct heat along the axis parallel to the planes of carbon atoms. This is because graphite is made of flat hexagons of carbon atoms, with each atom bonded to 3 others to make large, flat planes. Heat (and electricity too, in fact) can be conducted very efficiently along those planes. However, in other directions, the bonds are extremely weak, and hardly conduct at all.

Diamond, on the other hand, is a large latice, and can conduct heat extremely well in all directions, though it can't conduct electricty because all of it's electrons are used in single bonds.