If I remember correctly, the heatsink has undergone 3 design changes so far. The current heatsink, where the top edges are nicely rounded, certainly does a better job than the older versions. I agree with jokiin and murcod in that the design could be a bit better though.
The main problem, as I see it, is that the heatsink doesn't make direct contact with the DSP. To make direct contact, the part of the underside of the heatsink directly above the DSP would have to be raised higher than the rest of the aluminum. This would be to allow clearance for the numerous capacitors in the vicinity of the DSP. These capacitors stand quite a bit higher than the DSP itself. The thermal pad does exactly this, but thermal pads, despite their name, are not the best heat conductors. If the heatsink were to be in direct contact with the processor there will be another problem: Very precise engineering will be needed so that the heatsink is properly sandwiched between the top of the case and the top of the DSP. Any free space would make the heatsink wobble and thus lose contact with the DSP. Most probably a very thin thermal pad could be used, but I would prefer no pad at all, just an extremely thin layer of thermal paste to fill the cavities between the heatsink and DSP would be best.
Anyway, as it stands, the current design isn't bad at all. Heatsinks are designed to become hot, so there shouldn't be any worry. I am also not aware of more than a couple of mobius' being destroyed by heat, and perhaps there was another problem that led to the excessive heat. For example, a low quality power supply could easily lead to excessive heat, but that's another subject altogether 🙂. The developer has often considered using a metal case, but I much prefer the plastic molding which never becomes too hot to touch.
When we tested the prototypes we had to cover the surrounding components with insulating tape in order to attach the heatsink to the DSP and avoid short circuits. As I recall, the prototypes didn't have any thermal pads or paste so the heatsink was never in direct contact with the processor. However, the heatsink still got hot! The prototypes we tested came without the casing (the case wasn't ready at the time 😉) so there was plenty of airflow. However, I must warn against using the Mobius without a heatsink unless it is very well cooled. It will not last very long if you use it for continuous recording. A few minutes is fine though. Drilling holes in the casing will definitely help to keep things cooler.