I agree with Oldschool, buy billet first THENbuy the go fast parts. Here is what I did. First I bought kit #1, then I rode it, then I bought billet parts and AFTER I had the billet parts I removed the gov, to keep myslef from running without them. Then rode it for a week or so and got a cam, head, (already had a flat top) bigger carb, 18 lb springs. That's what I did, and I ended up with some extra parts but I find that half of the fun is building the motor, and I would stay away from ethanol unless you want to go crazy with parts (like stroke it).
Oh yeah, choose a carb now because they aren't easy on the wallet. I run a tillotson and a gx390 carb, and I like the tillotson much more. I haven't tried any mikunis, mainly because I was able to find a tillotson carb at a small engine repair shop, and I got it for 35$$, the same one that agk sells, brand new because they bought it to replace a chainsaw carb but it was too big and they couldn't return it, I didn't know the size of it at the time so it was a gamble, but it worked. And 14cc heads are easy to come by, a lot of pressure washers use the smaller honda engines.