Firstly, stopping and turning should be a priority.
I'd plop the old motor in with a loud pipe and jetting to make it sound fun, rape it 'till it explodes and go from there.
Handling: How big are your forks? I have two sets of ZZR600 springs and internals if you have 41mm forks.
Better rubber, always worth it.
Get a fresh rear shock up inside the bitch.
Drop all the weight you can from the bike, get a pathetic little tail unit and make an alloy subframe.
Stopping: better pads, braided lines and new fluid. Maybe even a twin disk set up from a ZXR250 with USD forks, not sure if it's worth the time/money though.
Go: Standard motor.
Modify ignition rotor to advance timing and decrease engine life
Increase port sizes and polish them to reduce low end power
Throw bigger carbs on it, to completely destroy the low end power (I may just have the thing in my garage to help with this)
Jet it and run the prick on straight pipes.
Thrash and enjoy, no need for more power to have fun.
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