I find that the biggest thing that people miss out on for power is tuning. Two races ago I had an unadjustable carb on my twin flatty. I worked hard and got 2nds, 3rds and 4ths.
By this last weekends race, I had received my adjustable main jet. Although the guy that usually gets 1st in our devision was not there, I swept 1sts in every race I did on my tractor passing guys that passed me last race. I think some of the people there tried to use the fact it is a 12.5 while their's are only 12hp as an excuse, but in all honesty, I think I was the only one to touch a carb adjustment the whole day.
It doesn't matter whether you run a stock 8hp briggs with a governer, or a V-Twin 18hp Indian with aluminum flywheel, cam, stronger rod, etc, you are not going to be competitive racing in your class until you spend the time to tune the thing properly (That also includes handling). You can throw as much money as you want at it, but some guy like George that knows how to dial a machine is going to come up beside you and pass you when your $10,000 motor stumbles coming out of that corner.
Honestly in my opinion, if you want to keep it as cheep as possible and be fast, run in the class that you can build competitive cheap. Don't try to compete in FX for $400, spend that money on making a fast IMOW.
Lets face it, I have seen 12hp's outrun 18hp's and it was only because that 12 was running and handling sweet, while the 18 was stumbling and plowing its way around the track.
Never assume you have done all that you can to make your machine go as fast as it can in the configuration it is currently in. There is always some angle of screw that would make it go just that much faster.
just my .02
Grant