The t-stat kit is made to be used with a different type of cooling system called a LPHV (low pressure high volume) cooling system. This is one of the best cooling systems IMHO and I won't run anything else. It solves a couple of problems inherant in jet boats: 1 of them being the problem of the temp fluctuating with pump RPM and the other would be the possibility of overpressuring the block gaskets and getting water in the oil which is all too common on boats with OT headers.
You've probably noticed on most jet boats how the engine temperature fluctuates with pump speed, similar to how your engine temp in your car would do if it were low on coolant. This is because the water is restricted by an adjustable gate valve between the pump and the engine. The reason for that is to keep the pump from overpressuring the block, which would otherwise blow gaskets and get water in the oil. But while limiting the pressure, it also limits the water volume (the actual amount of water) that can get to the engine. Because of this, at an idle there isn't enough water to completely fill the engine block, causing the temperature to rise at the slower pump speed. As the speed of the motor and pump are increased, more water can now get to the engine, cooling it back down.
The idea is to run the water fully on. Now with it set this way the pump can and will overpressure the block. To prevent that from happening, you run a bypass pressure relief on the inlet of the pump. You can get them at McMaster-Carr...
http://www.mcmaster.com and they sell for about $50. Their part number is 9763K12 and it's the one that's rated for 0-300psi. They're adjustable and you want to set them with air so that it's just starting to open at 12psi. With the large volume of water that the pump kicks out when unrestricted, any excess water that causes the block pressure to build past 12psi will be dumped overboard. You then run 2 overboard dumps. If your headers are using one of your overboard dump connections, this will need to be removed as this connection will need to be ran to an overboard dump fitting. The header water will be tapped from another source.
By not restricting water to the block, there will be plenty of water to completely fill the block, eliminating the possibility of hot spots in the heads.
So now you have full unrestricted water flowing from the pump, the block is always completely full of water, and your engine water pressure is perfect regardless of pump speed. So far so good right? However, with this setup the engine will run far too cold. We need a way to boost the engine temp up to 140 or so for proper combustion to take place. This is where the thermostat kit comes in. It's job is to provide a means of raising the engine temperature without restricting water flow between the engine and the pump.
Now you have perfect block pressure and since the block is always full of water regardless of pump speed, you now have a constant running temperature of 140* - 160* with no water in the oil.
Now for header equipped boats...we need to bring the header water in from another source. You'll need a gate valve between the Bassett T-valve and whatever water source you decide to tap off of. You can T off of the water coming from the pump, or you can even remove one of the pipe plugs from the intake manifold water crossover and tap it from there. This way, opening the gate valve sends more water to the headers and has no effect on block pressure. Again...no water in the oil.
Hope this helps.