Whenever I change either water pumps or thermostats(anything that allows water to flow through it), I always use the provided gasket, and smear a little permatex(I like red) on both sides, then tighten it down. I've never had a leak.
Not sure what the thermostat housing is made of on a '98, but a lot are made of aluminum. It doesn't take much to overtighten them, so I just make it snug. Although, I'm sure there's an actual torque rating if you have a manual.