i'm new to reeftanks, but i've definitely done my fair share of plumbing (unfortunately I guess!). the important thing with teflon tape is to tighten, with a wrench, all at once. the idea is that the friction caused by the threads turning around the tape will melt the tape and create a seal. if you tighten a little, then wait, then tighten some more you never melt that tape and you'll never get a good seal. try it, and don't be afraid to use a couple of turns of tape!
HTH...