White is for water, Yellow is for gas. Gas will eat the Teflon tape, due to different manufacturing. No, you do not need the tape on a flared fitting, only when connecting a regular cut threaded fitting, or pipe dope, which is better.
The tape & dope keeps the fitting from becoming frozen in place over time, and makes it easier to remove, but on brass fittings, you do not have to worry about that. Only reason some people use teflon tape on water connections for sink, toilet lines, is just extra security, in case a leak happens pass the rubber o-ring inside the hose.