Along with a heat sink, I also recommend a thin layer of thermal compound to improve the heat transfer. This is essentially the same as what is used with computer CPUs, output transistors and other devices. A small amount is squeezed between the heat source (such as a motor casing) and the heat sink to fill the spaces between the surfaces. Easy to use and makes a large difference. Hobbyking sells some in tubes, product number "9171000063".
Well not exactly. There are clearly defined different grades of thermal conductive compounds for different applications. Some types will act as an adhesive between the heated device and heatsink, while others may dry or stay wet. Some contain electrically conductive solutions as a simple part of their processing, some are non conductive but slightly capacitive between electrical conductors, and other are non conductive and non capacitive. Some will stay moist but are speced not to be adversely affected by gravity in vertical mounting solutions. Most any type will suffice on a motor casing, but a thermal past designed for general heat distribution in a passive or forced air cooling scenario may not prove satisfactory in vertical monting situations, thus to claim they are the exact same thing is a blanket statement. For having a pro contributor label at giving advice, you've proven not to be very good at it. Your condradicting attitude towards everyone and trolling on RCGroups earned you a ban and the moderators collapsed all your post out of view by default.
It should fit the e-revo 1/16, you may want to get two of them to cover the length of the motor. Also it will be much much more effective with some heat sink paste. There is a paste that hardens and a paste that stays soft, mix them 50/50 so that it will remain hard but still be removable. This paste is available at radioshack.