I used ARP thread sealer on my lower head bolts. It will seal threads from any fluids (essentially). I used it on everything that needed sealed (except vac fittings on intake) fuel pressure regulator, flywheel bolts, tranny plugs, heater tube, etc. It's also designed to be a lubricant for accurate torque readings and it never hardens. (Damn, you'd think that I worked for ARP (I don't))
I've heard that others use Permatex RTV, though.
Rick