It's much easier to install the water cooling system when you are building a new computer from scratch. However, installing one really isn't hard at all if you are adapting an existing computer. You need to make sure that whatever cooling system you do get, it is compatible with whatever chipset you are using. The kits will have several adapters and/or clips that attach the cpu water block to the motherboard.
No drilling or cutting is really necessary any more - depending on what kit you decide to go with. Most kits connect to standard fan mounts or sit in an empty drive bay. If you use separate components, you can sometimes get away with just letting them sit in the bottom of the case - as long as you don't move the computer around a lot.
With AMD chips, you may need to pull out the motherboard in order to install a plastic mount on the backside of the MB - though you may be able to use the existing one if there's one there already. When you remove the old cooling fan, you need to make sure the cpu is
very clean - if you need to, use a very fine grit sandpaper to give it a mirror shine. Any gunk left on the chip will reduce the efficiency of the waterblock.
The easiest systems to install are the external kits, where no case cutting is necessary. Just run the tubes and wires through an open slot in the back of the case. With external systems, you also don't have to worry about trying to cram all that extra stuff into a case (decreasing your airflow on top of everything else - which is still important for all of your other components). The only downside with the external systems is that it is a bit more difficult to move your computer without extra hands to help you.
Just as when you are normally working on your computer, make sure it's unplugged and you ground yourself. And of course, you should always test your kit for leaks
before putting it into your system. Measure your tubes (giving yourself extra lenght for safety, cut and assemble the system - outside of your case - and turn it on (let it run for a few hours to make sure there are no leaks. Then, drain and disassemble it, attach the water block/s to your motherboard, and reconnect and clamp the hoses. Test it again without turning on the computer (if it's possible with the system you use) - just turn on the water pump (connect it to a spare external power supply if you have one). Check for leaks. If there aren't any, you're good to go!
Some motherboards will not run if you don't have a fan connected to the CPU fan connector. I usually just plug in one of the case fans here - just to keep the motherboard happy.
You should always use coolant additives instead of just water. Just like a car radiator, using pure water will corrode the system. Most kits will come with a bag or bottle of additive - if not, be sure to order some. And make sure you use
distilled water instead of tap water. One system I had I used tap water - with an additive. It ended up getting all clogged up with a slimy mold....
If you are going to use a radiator with fan system, it's just as important to check it periodically for dust and lint build-up (just like regular cpu cooling fins). I had one system that I ran almost continuously for two years without cleaning the radiator. After I vacuumed out about a pound of dust, the system ran about fifteen degrees (Fahrenheit) cooler!
If you are going to 'strongly' overclock, I'd also recommend getting a temperature gauge kit if one is not already included - so you can monitor the heat levels closely.
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