Can someone tell me how this is supposed to be mounted?

Mounting instructions should come with it in the box. You basically just line up the four posts with the holes in the plastic frame surrounding the CPU and then turn each post in the direction of the arrow with a flathead screwdriver making sure to secure each post in the correct order given in the instructions. It's not too hard, just be careful and try not to force anything.
 
I would get a dif. heatsink if possible though, I absolutely hate those pins on Intel heatsinks >_>
 
Same. I've used them before, but I always feel like they're going to pop out.
 
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