First of all, i apologize if this is a beaten to death topic. I just purchased a 1979 z28 camaro thats in need of some love, but is going to be a fun project car.
As im sure most of us know, the stock engine this guy came with was a 350 only pushing 190hp. Pretty lame but it is what it is. I have two questions for anyone familiar with this year.

Im planning on replacing the engine, but i cant be immediately, it will be next year or the year afterwards.

1) What are the best performance add ons that can boost the horsepower of this engine? Obviously headers which im looking into, but other then that, keeping it bolt on so i can transfer these parts into a new motor in the future. Links and/or specific brands and makes would be appreciated, this is my first restoration and im only 20 years old.

Budget for old engine improvements not including headers: $500-700

2: i have no experience with crate motors but im curious which one would be a great fit for this car, keeping it at a 350 or maybe a little higher... This one has caught my attention, any other recommendations? Budget at max including the engine candy would be 3-3.5 grand.

Eventually id love 400hp.



http://www.jegs.com/webapp/wcs/stores/servlet/m20ProductDisplayView?catalogId=10002&langId=-1&productId=318494&storeId=10001

 

With a modest budget, and wanting to also use the same parts on the next engine, or this same engine if it was rebuilt. Headers and intake manifold/carb are about all you could do. The combination will actually put you over your proposed budget, but not sure you could just do some of it, and not more to really work.
Headers could be found used in good shape, and reduce some initial cost. I see good used headers locally on CL for about $50-$75 often. But headers wont work alone, and you'll want to complete them with a good free flowing dual exhaust. That will run about $200 for a universal kit to fit your Camaro.
Intakes are another area that you can save big, as good used name brand intakes are also plentiful, and often in the same $50-$75 range. I would stick with a simple dual plane, and not too high rise either. An Edlebrock Performer is a good choice, and will work with your stock engine, plus transfer to a new engine.
Carbs are somewhat expensive, but if you check on Ebay, you'll find Holley selling their factory refurbished carbs with new warranty for almost half price. A good 600cfm vacuum secondary, like an 1850-3 would work well, and Holley sells them for $200, with free shipping.
So that's it for your budget, and not more you can do that would transfer to another engine. One last thing. I'd consider having your existing 350 rebuilt, vs. buying a crate motor, or any online rebuilt motor. You can beat most the crate motor prices, even if you only pull the engine and drop it at a shop. The one plus of a name brand crate motor is the warranty. But if you mess around changing things on a crate motor, your warranty will be void.