The O ring seals fit into the second groove on the valve stem, the one below the split lock groove. It's supposed to prevent oil from running down the valve stem and puddling on top of the guides. Umbrella seals are supposed to have a tight enough grip on the valve stem to ride up and down with the valve and deflect oil away from the top of the guide like an umbrella protects you from rain. There's a third design called a "positive" seal that clamps down on the top of a machined valve guide and keeps a firm grip on the valve stem as it slides through the seal. Umbrella seals for intake valves usually have a deeper cup shape than the ones for exhausts, but both should be a snug fit on the valve stem.

It's possible to seal valve guides too well and starve the valve stem for lubrication. Then the valve stems and guides wear out from running too dry. A properly designed seal allows a tiny bit of oil to run past the seal and keep the guide lubricated. If you use umbrella seals, DO NOT also use O rings, etc.
Jerry

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