What would you do?

Here is a place to go to get a set of E7TE heads CNC ported and rebuilt:

http://www.powerheads.com/SB50.html

First off, you should find out EXACTLY what you have before you do anything. Decisions depend on what's in your engine to decide what's your best bang for the buck. You need to know what year your block is to help determine the compression height. No sense in stuffing in a nice cam and other speed stuff if you don't have enough compression (or other reasons) to benefit from it. Heads are a big factor here. I don't know the exact chamber size (CC) of the E7TE head, may be 60-63+ for all I know, and on a short deck block, that would be ok. However, on a tall deck block,that could hurt, more than help you. Pistons... thats another one. What do you plan on using? Re-using yours? Thats fine if they are salvagable otherwise you'll need to shop around for a set of pistons that will work for your budget and combo. Yeah, sure, forged pistions are nice and all and the racers use them, but are you a serious racer? Are forged or hyper.. really necessary? Certainly not in your budget, right? So just look at it that way and be logical. Cheap is cheap, but expensive is... well, you may have a nice set of pistons and not a running engine, if you get what I mean. Those two things are critical because once the engine is built, you cannot change that. Well, you can, but it will cost you lots more $$$.
I'm not trying to shoot a hole in the E7TE heads, they probably are good heads. But just about any ford head could be just as good, if not, better. I had a tall deck block on my 1st 302 and I had a set of '66 289 heads done up with chevy valves and fully ported. Cost was around $550 for the pair. Yeah sure a pair of E7TE were similiar but I was after the small heart shaped 54cc chambers the '66 heads provided that could boost the compression greatly without me having to change from my stock-type cast pistons that sat deep into the bore. After I got my heads back i took them to a local speed shop and put them on the flow bench just to see how they'd fair. They outflowed a stock set of E7TEs by 30-50 cfm between the intake and exh and totally out-flowed a stock set of 289 heads. (didn't have info on a set of ported E7TEs at that time) So i figured that was alright since I was after the smaller chamber size anyways.
Anyhow long story short, that engine was suppose to put out 410 hp to the flywheel and most of that engine was stock (totally stock bottom end) with a few aftermarket parts and certain collaberation of stock parts. It was more likely 380hp, i'm sure. Probably could have pulled 20 more HP out of it with proper tuning and possibly a larger carb. Now that was with 8.67:1 compression. Had I taken the time to re-do the lower end and choose better suited pistons netting 9-9.5:1, I may have been well into the 400's. IIRC that shortblock had possibly 15-20K on it as I pulled it from my Ranchero too and i spin it all the way to 6500 repeatedily.

In short- know what you got, do some research, ask questions, take your time and spend WISELY!!! And you could build a nice, quick budget engine you can scoot around town in.

They'll go in preyy easily either way. The headmans are pretty forgiving. I would say installing all three (headers/eng/trans) would be the easiest as long as you have a load leveler on your engine hoist. The headmans work well because you can actually take a primary tube or two off to ease installation.

Actually I normally have my machinist pick the kit up for me. Under most circumstances (unless they are marking up the kits) the machinists get the best deals on complete engine kits. My machinist has the ability to add/delete or modify the kit at any moment and that's a plus when it comes to last minute changes and such. Call around and see. Don't worry about the overbore size just yet. Get the block to the shop and they'll let you know what size you'll need as well as the crank/rod bearings. In most kits, the price doesn't change with different overbores unless it's something out of the norm, like say a .050 overbore.

RV cam??

Why not a mild performance cam to use with the ported heads, such as a 220i/230e dur @.050"?
Also, those factory alum. HO 4bbl intakes have terribly small ports. I went with an old 289 4bbl cast iron intake because they have much larger ports, back before I could afford an aftermarket piece.

The term "RV cam" is generic anymore. It's really loosely used amoungst those who don't know much about cams. Nothing wrong with that. The cam you're showing in your kit is the same spec as the Edelborck Performer cam and also the same grind that alot of other cam outfits also use. IMO the Performer cam would work better as a hat rack. See if you can upgrade to a 280/290 adv duration (214/224 @.050 duration) with .472/.496 lifts. That would be a much better cam and you can still run stock-style springs unless you want to pony-up for stiffer ones and should still clear the pistons by a mile. That cam is anohter common option with these guys selling these kits such as the one you bought from this guy. This cam will also make the E7TEs breathe much better.
If you're not gonna port the E7TEs, that's fine. At least put 351W valves or a little larger (1.94/1.60 max without bowl reworking). Shouldn't be that much extra since a typical head rebuild requires re-grinding the seats and the valves are usually trashed anyways.
The Procomp Ignition probably wasn't really necessary at this time but certainly beneficial later on when you had extra cash. The stock duraspark with a hotter Mallory/Accel/Msd coil would have been just fine along with a good set of plug wires.
I agree with Blue Thunder. The '83 4bbl intake is more or less worth its weight in aluminum. If it all you got, than it'll have to do. However, he's right about the '66-'72 289/302 cast iron 4bbl intake, it's a much better unit with larger runners and compares a little bit with the Edelbrock performer. The cast iron units are usually dirt cheap.