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they are between the cylinders on the deck surface. yes you need them if your going to use the motor on the street. the 400 blocks have symiese cylinders and if i remeber correctly, coolant doesn`t flow between the cylinders like it does in a 350 block. i can`t remeber if water actually goes through the steam hole but it keeps the cylinders from over heating by letting the steam out of the area. someone else might have a better way to explain it to you but unless your useing the motor for drag strip use only, you need them and the have to be drilled at a certain angle. most machine shops can do this for $50-$75 depending on the shop.
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Anthony
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