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A guide to delidding – What is delidding? – ekwb.com

Basically the top of the CPU is removed – the “heat spreader” on the top of the CPU. The Ivybridge processor range of which my CPU is a member of, Intel switched from soldering it on to sticking it on with crap thermal compound.
You remove the top, replace the compound with something better and achieve lower temperature of the CPU by increasing the efficiency of the thermal transfer to your CPU cooler

Lapping is basically hand finishing the CPU heat spreader using various grades of sandpaper and a very flat surface (piece of glass for example). This exposes the copper interior of the heat spreader and removes any convex/concave shape from it to give a better contact with your CPU cooler.

An example picture here (not my CPU) – but it demonstrates how out of flat they can be from Intel:
http://www.kwikpiks.com/files/1/Lapping/Lapping3.jpg

This is all to aid in cooling the CPU and reversing the crap job Intel did with the Ivybridge and onwards.

The CPU works exactly the same as normal just runs cooler – up to around 10 degrees in some cases – the heat spreader is initially held in by the CPU mounting mechanism on the motherboard and the paste applied rather than glued on like it was from factory

Picture attached of the CPU in situ