Thermo-switch gasket? & green A/C wire?

[Adam and Soma Dixon <biwltud@bellsouth.net>]

I recently bought an '89 100 and attempted to replace the radiator
thermo-switch, thermostat and lower hose this evening.  Upon reassembly
and the addition of coolant, a leak occurred at the thermo-switch.  The
new thermo-switch had a gasket with it, which appeared with a felt-like
surface.  Was this really the right gasket to use?  Should I have used
some teflon tape on the threads?  Based on the size of the leak, I
really goofed and would appreciate being set straight.  

Also, the A/C compressor isn't working yet.  When I removed the
radiator, I noticed a green wire running to the compressor, which has an
intermediate pair of connectors placed almost under the radiator (ie.
out of sight!).  What is the function of this green wire?  Could it be
the reason that the compressor wasn't kicking in when the Climate
Control unit was set for LO?  I have looked at the Haynes manual for
'84-'88 5Ks and haven't come across this wire in the schematic set. 
Thanks.

Adam Dixon
'89 100 (first Audi experience!)
biwltud@bellsouth.net