Of course it isn't sitting properly - that's the whole point!
The photo was taken WITHOUT the retaining brackets so you had a clear view. Whilst the heatsink isn't positioned perfectly on the CPU, the edge of the fan is still sitting on the top of the memory and was when I started trying to screw it all together before I put Arctic Silver on top of the heatspreader and heat-sink.
The exhaust is pointing at the rear of the board which is the whole point of this heat-sink: get the hot air out of the case ASAP.
If you need further proof look
here.
Thanks for your input anyway
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Just looked at the ASCII art.
Doh! OK. That raised bit at the back? That is where you attach the thermal probe that comes with the heat sink so that the fan can automatically change its RPM dependent on the temperature of the heat sink. The reviews that I have read state that it works very well and is better on the ears (allegedly) than using one of the two included rheostats.