Not all, but many Subarus produced from 1996 to 2000 are/were prone to head gasket problems. If you're set on buying one made in those years do your homework and make sure that either you're buying a non-faulty-engine-model(!?!), or that the head gaskets have already been replaced.
If you can afford it just get a newer Subaru or, if you can find it, an older one (hint: there are A LOT of lesbians who live in Cascadia).
If you want 4WD, good mpg. and dependability in the price range of a 1999 Outback there's not really much else out there (Honda CRV maybe?).

I've been driving my 97 Outback for 10 years and have never had any problems. I change the oil at least every 5000 miles and have hit most of the major tune-up times. It's a great car that I'm planning on driving into the ground.

This is purely anecdotal information, but you may find it useful.

My in-laws drive a 1996 Subaru Legacy to this day, and it's never given them a moment of trouble. The insurance company finally totaled it last year...when a hailstorm dented the hood, but that's the only issue (and a cosmetic one at that). They also live at 7,000 feet and get lots of winter snow and cold temps, which may or may not affect your decision. They raised three kids and a grandkid with it, and often drive it between NM and ID, 15 hours at a stretch. No problem.

Mr. Sacrelicious says the only diff between the Legacy and the Outback is that the Outback has one more inch of clearance.

From everything I've heard, Subarus are great used cars. They're nearly bombproof and often get well over 300,000 miles. We're planning to make that our next (used) car when my Exploder reaches the end of the road.

What are people driving in your area? I lurve my Subaru, but there are lots of other great cars out there. You may find, actually, that because Colorado is drier than other places, even though it might be cold and snowy that the roads aren't actually all that bad.

FWIW, very happy with our '09 Forester.

This is a total anecdote but may go a little ways to confirm a bigger picture.
A friend had a 1994 Subaru Outback. It had this very problem - leaky head gasket. He went MacGyver on on it; took it apart and repaired it himself.
He sold it shortly thereafter and bought a Prius.

He says I have to stop calling him a lesbian now but I'm not so sure.
(See Kristin, I get to do it because I'm riffing on you not the original poster)

I think it all might depend on whether or not you are a lesbian.

Hey everyone, cut that out. Subarus know no race/gender/sexuality.

I had an '86 GL wagon with on demand 4WD. No head gasket problems but the oil pump went, which was an cheap repair.

That car took me to Snoqualmie Pass and beyond in all weather conditions and it was a champ. I bought it at 104k miles and it went to 200k just fine.

And if yours ever needs repairs, take it to Superior Subaru in Burien. Steve is the best.