Even if you change the valve cover gaskets to try and avoid a fire, I suspect that the real culprit was the quick disconnects at the fuel lines, which if disturbed even once have a way of leaking and causing a potential fire hazard. I had to replace the o-rings on mine when I swapped motors and its been all good since. And get Fel-Pro valve cover gaskets AND grommets and call it a day. Don't cheap out on those.
The recall was nothing more than them replacing the front plug wire guide w/ an updated version that lead the oil leak to a different location. A crappy bandaid to avoid law suits. FWIW, I'm still running my stock wire guide up front, but have Fel-Pros in place and have yet to see a bit of oil leak.
I personally would go for the 00. The 97's were an odd duck, as well as the 03's. Not hatin on the 97 guys, just personal opinion. And yes, change the LIM gaskets (even on the 3.8's) to the aluminum ones, which all 97-mid-04's suffer from. And I prefer the 3800 to the 3100 any day.
And yes, the 97 GT had the weaker 4T60 vs the 98+ 4T65E (or the 4T65E-HD for the GTP).
I'd walk up w/ $2,400 cash if the 00 is clean and see what they say. Always be ready to walk away. They made a bazillion of these cars so another good one isn't hard to find. I have 265K on my 00 GT and haven't had any major issues with it (aside from me grenading the motor on accident, but was my fault). Still looks better than 80% of the cars on the road today and gets good mileage.
There are a few things that I would check out on either car before buying that are known weak points of these cars. Trans., milky oil, coolant color, etc. If you're not overly familiar with this then just ask and we can be more specific.