According to Haynes, Chilton's, and even the Ford book, you must use thread sealant (outer bolts only) on later model 5.0's. Why wouldn't you even if it WAS just a mild insurance policy? Haven't any of you guys looked into the bolt holes on a 5.0 block? There's the water jacket right there! Hence the rust on some bolts when removing the factory originals. Even when using studs I would highly recommend sealant, and NOT RTV. That stuff is pure evil IMHO, and has absolutely no place in a well-built engine...unless you like gasket failure as stated above.
The ARP stuff is the way to go. In some racing applications, they are using what's called Hylomar for head bolts, but then again they're only used for one run then thrown out. I'd call up Permatex before using that or the PST they manufacture. But why risk it? Just use the ARP stuff.
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Capri306, Moderator, The Mustang Works Online
1979 Mercury Capri, 5.0L -- C4 -- 2.73
1987 Mustang LX Notch