Low end torque

Is this an auto or manua and how did you try to do a burnoutl? This is no reason what so ever why a bone stock 289 shouldn't light them up. I have a 92 honda accord that I can do mad burnouts in (so bad once that tire smoke came in through the air vents). Anyways, to answer your question, the best way I know of to get low end torque at the wheels is gears. After I got my 4.11's I had no problem spinning my tires in 1st or 2nd or 3rd.........or a little in 4th.

Welcome to the Stang world!
Some things to consider with SBFs (small block Fords 221-302)...
They are not known for making gobs of torque due to there small size.
They do not follow many of the same rules that you read in mags about torque production and parts recommendations... those are geared to brand X engines with about 350 cubic inches.
The stroke is very short on SBFs... therefore the engine revs easier, makes less torque, and withstands high rpms better than brand X.
In short: Don't expect alot of torque from your 289, rather build it with razor sharp throttle response so the revs rise quickly and burn your tires at higher rpm.
You tell us very little about your combo, this would help some, but those are the 101 basics of SBFs.
Dave

ratio411 is very correct in what he said, but there are things that can be done to improve the torque of a small block, such as choosing the right cam, stroking the motor, getting better heads, and perhaps a different intake. Without more details on your engine, it is difficult to make any real observations or recommendations. I will say you've already made a good choice with the headers and exhaust, but the 2.5" pipe is probably a bit much for a mild 289... 2" or 2.25" would probably have provided more torque.

Post more details on the engine (is it original? stock? rebuilt? 2V or 4V? etc...) and you'll get more useful replies.

edelbrock performer dual plane intake, free flowing air cleaner & turn your factory air cleaner lid upside down, 600cfm 4v carb, tuneup, pertronix ignitor II, 3.50-3.75 gear, advance timing til it pings under load then back off a small bit, 93 octane fuel////that will wake it up.... try the free stuff first - timing advance, good fuel, then move up to the other stuff as your budget allows.

Gears are conciderd the most bang for the buck, and I can testify to this. I did go somewhat extreme, but the idea still follows. Like raito411 said, the sbf doesn't make a lot of low end, and is more of a higher rpm motor. This makes it a great motor for gears. However, remember that mustangs are light cars, so going too extreme and all you'll get is a dumptruck.

Tell us more about your car and it's mods...