Your first mods should be as follows (my take):
In order of Priority
1) Subframe connectors (SFC's) full length ones are prefered
2) Gears: 3.73:1 or 4.10:1 seem to be the popular choices
3) Buy a K&N panel filter (no CAI kit required) and put it in the stock box
4) Exhuast (headers, hi-flo cats, mufflers)
5) 3G alt upgrade / electric fan
6) Larger MAF, TB (your car will be speed density so skip the MAF part of this)
7) Fix the weak brakes
After those, it's pretty much up to you. There are plenty of Super Chargers or Heads, Cam and Intake packages to choose from.
Also, don't forget about the basic tune up which should include:
1) Changing all of the fluids (oil, coolant, trans, rear end, brake and some of the power steering)
2) Plugs: (non-platnum type) Autolite or Motorcraft
3) Oil filter: Motorcraft or equivalent (not FRAM)
4) Air filter: see above
5) Plug wires: Ford Motorsport (FRPP) 9mm units are great
6) Cap / Rotor
7) Oxygen sensors
Edit: If you are new to the Fox body mustang you can also look at my tips thread to understand all of the common problems associated with these cars.
http://forums.stangnet.com/showthread.php?t=573378