Dennis,
Its been a couple of weeks since I installed mine - but I think I removed the old O ring, and rested the new one inside the pipe that comes from the cat converter (read engine), and then placed the new mufler pipe over it - tried to make sure it was square in there, and then replaced and tightened the bolts. It might be worrth getting a couple replacment nuts if you can, just in case. The more I think about it, I don't think it matters much which pipie you rest the O ring in - its going to end up getting squashed between the 2 pipes anyway. My instructions told me to check for leaks, to start the car, and breifly put a rag in the tail pipe, and get my ear close to the area of the O ring, and listen for leaks. I tightened my bolts pretty damn tight (but not "medeival on its ass") and I did not hear any leaks - so I assumed all OK.
Too bad you have to go thru the process again. I guess for me, if I do some mod I'm not too sure about I call the dealer in advance and ask if there is any extra gaskets or sealants before I do the job, just cause I don't want to be missing small parts when I have everything apart.
- Woody