It doesn't matter to some people, but you get a nice warranty with those crates, and your going to void it as soon as you swap cams or heads.
I just bought that same motor this week and got it on the engine stand last night. It will be next week before I can comment on how it runs, but I opted to leave it stock and keep my warranty. Supposedly, you can add a good intake, a fine tuned carb, and a set of headers to that block and pull 260hp out of it, but I can't vouch for that yet.
And it's got nice torque numbers.
The first upgrade, as Skweegle says, is a good intake, a finely tuned carb, and a set of headers. That doesn't void your warranty.
The best performance option you can add at that point is an A/FR meter, to get that carb dialed in.
Second upgrade is to replace the cam with a 12-235-2, 12-300-4, or similar cam. You are looking at 275 to 290 hp, and north of 400 lbft of torque at that point. This voids your warranty.
Third upgrade is to replace the heads and cam both. A set of Dart aluminum heads, and a 12-238-2 cam for example, will get you close to 400 hp while retaining 400+ lbft of torque. Vortec heads is another option, but probably does not net you what the Dart heads do, but they are much cheaper. This also voids your warranty.
For me, the cam upgrade is enough, because the horsepower numbers are not what you drive. Horsepower is measured at or near the redline. The torque numbers are more important, and getting that torque peaking in the 2500 rpm range is what makes for a good driver.
Tom Wellborn sold a whole bunch of cars from the Wellborn Museum at Mecum Kissimmee last week. Hemis, LS-6s, you name it. He said the quickest car he had was the Buick GS 455 Stage 1. Only 360 hp (where the hemi is 425 and the LS-6 is north of 450), but it has 510 lbft of torque at 2500 rpm. It was the quickest thing on the street back in the day, and you quickly learned not to mess with those guys no matter what you had. I know, I was there.
So the cam upgrade is pretty easy before the engine goes in, it is cheap because on a new *never-run* engine you don't even have to change the lifters and springs, and you get great torque where you use it. It won't wind as tight as some other setups, so horsepower numbers won't be as high, but that's not what you drive unless your daily commute is on a circle track.
