Permatex Anaerobic Flange Sealant w/ Surface prep works really well and any excess will dissolve in the trans fluid. Another sealant that works very well is Honda bond.
The copper gasket J_Parker mentioned is pretty agressive and is mostly used for copper crush gasket replacements, turbo oil line or coolant flanges and etc. That stuff is a bitch to break loose and even a bigger heache to clean off. Anaerobic is what you're looking for as the definition is what it does "cures in the absence of air".
The other questions you have are answered in the TIM someone posted. Follow the disassembly and reassembly steps and you should come out fine. Unless you bought that unit from a reputable shop I would take the whole thing apart like Forest said and go through it.



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isdain: And seeing as he's unemployed... I don't get a new one for about three weeks. 



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