Phil, have you got any links to newage wagon STI's for sale? they are a very rare beast
if it is a good, clean example I'd keep it and mod it.
my blob was completely std when I bought it, 100k on the clock and it made 242bhp on the rollers
'green' panel filters always give results, most induction kits get similar to uprated panel filters
a decat up pipe and down pipe, new fuel pump 255l (I've had 2 walbro's and they have both failed within 18 months, been running one of these for over 2 years - either 341 or 342 http://www.racespecperformance.com/index.php/performance-parts/engine/fuel-pumps.html), and a remap (ecutec usually £550 or open scource £350ish). will probably cost about 1k and you should be getting 270ish bhp and that will be a quick car