Delray,
A guy named Tom Renzo from the
Ford Mustang - GT - Shelby - Cobra - Classic Mustangs forum is a mechanic constantly working on mustangs. He told me that punching out the cats will free up horsepower, but removing them completely will actually result in a loss of power. He has tried both on the 2.3L, and you do lose power. However, with the 2.3, the loss, he says, isn't really that noticeable. When I have time I'll find you his post, but I unfortunately have to go back to work lol.
AngelApollus