Nic,
Are you SURE you want a speedster? A 12 second car is not like a 12 second bike. Going that fast on a bike takes nothing but a few thousand dollars, an open stretch of road, and a false sense of indestructability. "Back in the day.." when I was just out of high school driving late 60s- middle 70s Detroit "muscle" cars not good for anything other than a straight line, a car that could get into the 13s was pretty hot. Going (a lot) faster in an air-cooled, four cylinder VW powered speedster is not going to be a "low budget" proposition. George is right about the h/p numbers you would need, and your not going to get it in a 1600, 1776, or anything else you are considering, unless you are considering a $7000 engine and $3000 transaxle. When you are done, you'll have a monster engine/ trans combo on a shortened VW pan, complete with flexible framehorns and mid-pan flex in the door area. I'm completely with Jim on this one- you first, I'll be over here watching... Getting the car to hook up, w/o twisting in half is no small matter. Stopping it after you do is another thing altogether. George spent what it takes to be the 900 lb gorilla (for now) on the block, and I'm guessing his pockets (and commitment) are deeper that yours for this project. My advise- build a nice car, with a nice relaible engine. Be happy with it. You wanna race? Take the $10K+ you saved and buy a used ZX10 for $3K and smoke those $50K german sedans and ricer cars. Invest the rest, give it to a charity, do something other than try to make your car into something it was never meant to be...
Let the flames begin.