Yes,
I did this years ago (2017) on my final rev PBG4 12" and it is still running perfectly (I used 2mm pads). I use this little PowerBook almost every evening to put some time into my Tiger Cocoa projects. That particular unit is possibly one my favourite / most sentimental Macs.
If only I had seen your post re: the A1261 yesterday, as I had mine fully dismantled for some repairs (LCD panel replacement + Optical drive) as well as fresh thermal paste. It's now running much cooler with Arctic Silver 5 (CPU Diode idles at 50°C as I am typing this post), but during compilation and benchmarks, the CPU Diode temps still peak around 105°C after a few minutes of CPU flogging. More than hot enough to cook an egg, but not uncommon for a C2D MacBook Pro.
Now I have to muster up the motivation to pull it apart again and apply thermal pads to the underside of the heatsink