Yes you will need the oring, and yes it will make the bike sick without it. Check the end of the Jitsie air screw has the tapered needle still attached - mine stayed in the carb when it broke off.... so I got a replacement. I run mine about 2.5-3 turns out.
The bikes are shipped from the factory lean in the midrange to pass emissions standards. I, and a heap of others, have raised the needle right up (put the clip on the bottom notch) for an improved bike. Do the same mate and see how it runs.... it will have a heap more power.
Ralphy