This is a picture of the base of W1zzard's Cascade showing the heat-induced oxidation of using a certain thermal paste on a P4 (with an IHS).
Now one can easily notice the roughly circular shape to the oxidation pattern and how it is worse in the middle and tapers off to the edges of the pattern. One can also easily see the outline of the IHS (30x30mm in size) indented onto the block's base.
A rough on-screen measurement shows that the circle is about 15mm in diameter, with the outer 1.5mm of that 15mm circle showing where the level of heat is dropping off. One can see a vague larger circle that's out 20mm in diameter, and outside of this there is no oxidation at all.
So how big is the P4 die? It's a square about bang on 12x12mm in size (12.15x12.15mm I think is the near exact figure) and it sits dead in the middle under the IHS.
As far as I'm concerned, this picture shows very clearly that the bulk of the heat, even with an IHS, is still focusses directly and immediately above the CPU die, but instead of being a square (like the P4 die is) it just "rounds" off the heat pattern slightly. Within 1.5mm from any edge of the die the heat induced oxidation is basically non-existent, with only very minor heat levels making it much past that 1.5mm periphery, dropping to totally insignificant levels by 3-4mm past the edge of the CPU die.
This evidence is perhaps still circumstantial but I hope that it is enough to quell any nagging doubts some of you may have about just how ineffective the IHS really is at spreading the heat, and that the term "Heat Spreader" really is a bit of a misnomer when one applies strong focused cooling directly above the CPU.
The Cascade's main cooling effect operates as a rough rectangle about 21x17mm in size which is still plenty large enough to optimally deal with CPU dies up to 250mm^2 in size that have an IHS on top, and CPU dies up to 350mm^2 in size if mounted directly onto the die.
The ~147mm^2 P4, and the ~170-180mm^2 Athlon64's with IHS's still fall well under the Cascade's cooling "umbrella".