Yup, that's a helicoil! You need a special tap to use it and the kit usually includes the drill bit and tap IIRC. I have never used them myself, but I know they are not cheap. I saw them at Harbor Freight a month ago and I believe they were $30. As for gaskets, I agree that you should use the best ones you can get. Skimping here will lead to leaks within a year in a lot of cases. The cork valve cover gaskets used on my 350 when the machine shop assembles it leaked within a couple years but the rubber valve cover gasket used by Nissan on my Frontier pickup lasted 8 years and over 250k miles. Crank seals are an area where you DEFINITELY do not want to skimp or screw up. They are the biggest pain to replace, especially the rear main which requires transmission removal at the minimum and dropping the pan and rear main cap at the worst. The difference lies in the type of seal used. My 350 is a 1977 model and uses the awful 2 piece design that you have to partially disassemble the engine for, but 1987 and newer SBC's use a 1 piece seal like my Nissan has. The 1 piece seal is like a wheel bearing grease seal and fairly easy to change once you get in there. The crank seals on the Nissan are not perfect though, as they too eventually wore out after about 150-170k miles and started leaking. (It's a one owner truck and I have done all repairs, so that's why I am using it as an example here). It also has a one piece pan gasket that has never caused much trouble, but I did have to tighten it a few times over the years. It currently has no leaks and around 275k miles on it, so old engines can be made oil tight.
As for Fel Pro, their standard small Chevy gasket sets are cork and not rubber. I wound up using cork when I repaired mine earlier this year and it does not leak. However, I wish I had known this when I ordered my parts as I would have spent extra for better parts. Another thing to look at is the actual valve covers themselves. Cheap chrome ones always leak as they are made of thinner gauge steel than GM used. Chrome hold downs are also lacking in quality and usually contribute to the problem. It's ugly, but I used the factory valve covers, studs, nuts and hold downs when I put my 350 together and they seem to seal pretty well. If you want aftermarket valve covers, the only way to go is cast aluminum as it is stiffer and holds its shape better than stamped steel.
When doing a Helicoil, do yourself a favor and take some duct tape and cover the carb plenum hole so metal does not get into the cylinders. Also, if you pull the intake manifold and replace the gaskets, discard the end seals for the manifold and use RTV silicone in a color that matches your engine. It is available in red, black, silver, clear and blue. The end seals typically squeeze out and do not seal well. Put the manifold to head gaskets in place first when doing this, and then run the silicone about 1/4 in up the ends of the gaskets at the edge by the manifold. (It's always a good idea to use silicone on the joints of multi-piece gaskets like manifolds and oil pans, or even valve covers on OHC engines) Also put some silicone on the heads and manifold where the water passages seal to the gasket to fill in any corrosion pits that may be there and cause a water leak. Whatever you do, DO NOT put silicone on the intake ports as the gas will eat it and cause a vacuum leak!
Oh, and one more thing: Do not over tighten the steel valve covers, pan or timing cover as they will warp. To keep from doing this, I use a trick I was taught when I was about 17. I use a nut driver to tighten them as it will not permit me to put a lot of torque on the fastener. If I can't find a nut driver, I hold the socket handle by the head and not the end of the handle. You can also use a speed wrench, just never use air tools to do the tightening as it invites disaster.
