[BLACK85GT]

I have gone through the same dihlema. 302 or 351. Well if you go 351 it increases your expense because you need a different intake, headers, oilpan, hood (to clearance the taller 351). You also need some special brackets for the ac and power steering. As far as the heads, they should be ok, except you would need them drilled for the 1/2 inch head bolts the 351 uses.
I have a 351 and 302 sitting in my garage that need rebuild. I think i am going with the 302 purely for budget reasons.( can use my old headers, intake, etc.) Here is a link that sums it up. http://www.mustangcentral.net/tech/351.html