Slob is, (as ever!), correct - the two bolts should be torqued to 31Nm after applying some moly grease to the threads. Tighten them in the sequence 1-2-1.
When you check the play, you're not measuring the up and down movement as you would with a conventional swinging arm, instead you measure the distance from the underside of the swinging arm to the centre of one of the chain pins. It should be 62mm +/- 1mm at a point equidistant between the two sprockets with the bike on the sidestand.
Note that, while the suggested amount of play seems very loose compared with a conventional swinging arm, when you're sat on the bike, the chain tightens considerably so don't be tempted to over tighten it while it's on the stand. Get someone to sit on it and feel the difference between loaded and unloaded.
As for the chain itself, I've got a gold DID x-ring on my Evo. It's done about 8,000 miles so far with no real signs of wear. If you're going to fit the chain yourself, you'll also want a chain riveting tool for the joining link (don't be tempted to use the split-link.)