What components do I need to build a motor controller from the L298?
Looked at this the other day for someone -the data sheet's example show the diodes  are external

yes you invert the direction line - you can't damage it with having both inputs high or low - it ends up with both ends of the motor wired to gnd or VCC (active braking). Just hook up a TTL inverter, or a simple switching transistor (fet or bipolar) with say a 1k resistor between vcc and the collector and if it's a bipolar transistor something to limit base current