Re: 82 Mustang how fast can we make her!?
If you swap heads, you put yourself at major risk of piston-to-valve contact. Considering this is your first car, I'll go slowly. Not to belittle you, but to be sure you're following.
In your cylinder head (named such because it sits on top of the cylinder) are the valves that allow air to enter or exit the combustion chamber (cylinder). The valves move downward to allow the air in. The pistons are located inside the cylinder and move upward. Your pistons have flat tops, meaning there are no valve reliefs (notches in the piston tops) to clear larger valves. That causes big problems when swapping cylinder heads because if your valves contact your pistons, you're screwed. Some people can get away with swapping E7 (from a 1987+ Mustang, 5.0-equipped Capri, or Lincoln Mark VII) heads, but others aren't so lucky.
If I can make recommendations, here's what I'd do:
Swap your transmission crossmember with one from a 1986-1993 Mustang GT.
Install dual exhaust with a good H- or X-pipe, free-flowing cats (if you need to pass emissions), and a good quality muffler (don't go cheap on the muffler- the right choice can last you forever).
Upgrade your springs to some Eibach (or similar) race-type springs, as well as more performance-oriented shocks/struts.
If you're manual, install a short-throw shifter; if auto, install a shift kit.
Swap for 3.55 or 3.73 gears and a rebuilt traction lock (don't waste your time with 31-spline axles or aftermarket lockers- they obliterate the "budget" in "budget build".)
NOW, you're ready for engine modifications...
Swap for an Edelbrock RPM Air Gap intake
Edelbrock 1405 carb
Performance shorty headers (NOT eBay headers)
Have engine rebuilt; while it's out, install pistons from a 1987-1993 GT and install GT-40 heads from a Cobra or 5.0-equipped Explorer (don't go with the "P" heads- they're too much of a pain for what you're doing); I think the Explorers were 1995-mid1997.
That'll get you mid- to low-13s, if done properly.
Oh- and yes, these guys are right. The 302 is a fantastic motor for a base. The nickel content means minimal cylinder wall wear. I just tore down one with a little over 100,000 miles and couldn't see any wear at all on the cylinder walls.