Waterproof Temperature Probe

Sealing it inside a tube would be ideal. The thermocouple you've linked isn't waterproof. You can buy thermocouple probes in sealed housings from several sources. One popular source fo industrial users is http://www.omega.com/guides/thermocouples.html .

Rolling your own is fine as long as you select good high temperature materials for the sealant.

A thermocouple must be put into a thermowell if you wish to submerse it in water. However there are options, does the fluid have to be water? A dialectic oil would be fine and you could get much higher temperatures. If it must be water and you intend to make your own thermowell, then you should fill the well with oil and leave enough room for expansion before sealing. The oil will transfer the heat from the outside walls of the thermowell more efficiently than air. Also make sure the thermocouple is supported properly so not to short against the well.

I take it from the nature of your question that you may have not used thermocouples much. If that is true, then you should do some reading first. There are a lot of pitfalls you need to avoid. Such as dissimilar metal junctions in your wiring, and the proper metallurgy wire for the series TC you are using.

Hope this helps and good luck with your project.

I use one of these kitchen thermometers for my home-scale maple sugaring equipment:

http://www.target.com/gp/detail.html/181-2465896-2946763?asin=B0001BFJ54

The probe is foodsafe and works fine in boiling sap, although after one or two seasons it starts to pick up scale from the calcium impurities in the maple sap. (a tough problem to get around)

I'm not sure if the probe contains a thermistor or a thermocouple, but in any case it's a cheap off-the shelf solution that I'm sure you could use with your own circuitry if you experimented a bit.