Head gasket blew at 149,000 miles (seems to be a typical problem for the late 90s 2.5L).
Cam seals failed at 140,000 miles (also seems to be a common issue for these motors).
The point in the exhaust where the cat connects to the cat back exhaust, rusted out at 146,000 miles.
This car is the paramount of practicality with folding seats, AWD, windshield wiper deicer, heated mirrors, water resistant interior, high ground clearance, and very efficient front and rear defrosting.
The 1998 Outback has relatively slow acceleration that is far from exciting.
The stiffer suspension of this vehicle, coupled with the AWD, gives you the ability to turn tightly, even at relatively high speeds, despite the high and narrow shape of the early Outbacks.
Snow is no problem. My driving experience is nearly unchanged up until about 3 or 4 inches of snow. Even with 6 inches on the ground, the car performs beautifully.
The engine is pretty quite, but noise dampening in the cabin is a bit less than I have experienced in larger cars, such as a 2002 Intrepid or a 2000 Ford Taurus. I have cupped tires, which adds to the noise.
Although the boxer engine has many advantages (smooth running, low center of gravity, reduced torque steering, etc), the configuration puts the headers up against the sides of the engine compartment, making ordinarily simple fixes, such as replacing spark plugs, much more difficult. Replacing the plugs has been quoted at $300 (They ended up being replaced during my head gasket fix instead).
Also, the AWD kills the mileage. When I calculate the mpg on a tank full of gas, I can end up with anything between 18 and 25 mpg. I'm guessing this translates into roughly what Subaru advertises: 20 city/ 27 highway.