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shouldnt matter really as they both flow through the cooler, just whichever one fits best really. If you dont want to mount the cooler you can use the standard 323i bits to convert it

in the uk climate with modern semi-synthetic oils there isnt much point in having the oil cooler unless your doing track days and such.
i really wouldnt bother with it if i were you.

would i then need to plug them up with a bolt or something? or are they ok open?

no, basically you remove the housing inbetween the the oil filter and the block.
but you'll need the shorter bit that screws into the block to screw the oil filter on to.
what engine have you took out of the car originally? if its another m20 that didnt have the cooler set up then you can take the threaded bit off that engine and screw it in yours. simples.

engine oils in the early 80's were not very good when hot compared to modern oils. modern oils dont go too thin at higher temperatures, taking away the need for oil to air coolers on 90% of road cars.

I don't run the cooler and have not had any problems.

neither do i. i didnt want something else hanging round up front ready to disable the car if i hit a marker tyre/cone while drifting. thats why i didnt bother with the cooler.

im gonna have to run one on the white car as she is got a turbo and will have much hotter oil

Mines tucked up behind the valance on a custom-made bracket (well out of the way of road debris), will need it when the engine spec eventually goes up...

i have a spare pipe and have no idea where it goes? its a t shape pipe the first end goes to the thermo, the second goes to the fire wall of car and i have the 3 end coming down?