The flywheel O-ring is a graphite impregnated o-ring that installs in the groove depression in the flywheel where it mates to the crankshaft. Always replace this seal when replacing your crankshaft front main seal.
Don't forget you will need to torque the "Gland Nut" to 250 ft/lbs (check your shop manual for your specific model), so you may want to consider a "Flywheel Gland Nut Tool" and "Flywheel Lock" to do the job right..
EMPI