I would always change the engine to a 5.0 HO for getting more power.
It is too expensive to tune a 260 engine in the same way than a 302.
If you take the bellhousing from the 302/5.0 HO, it is easy to get the transmission fixed on the bellhousing. You only need a small ring and 4 new holes for the screws.
I had a 260 engine with headers, 4 barrel intake, a 600 holley and only get 165 DIN-PS on the dyno.
The problem of the 260 are the heads with the small valves and intake and exhaust runners. With other heads you always have the problem with the bigger combustion chambers.
Other brakes are a good thing, but you can drive with the original also.
I have a really strong 331 engine with original breakes and no problems, as I do not drive faster with the stronger engine than with the 260. It is only much more funny to drive in the same speedrange with the double power.
But I have ordered now vented discs for the front by dales restaurations, as this is a cheap change and it makes the brakes a little more save.
So if I had 1500 Euros, I would look to get a running 5.0 HO, good headers, a 4-barrel intake (weiand stealth), a 600er holley vacuum secondary and a mallory pointless ignition.
I you do all the work on yourselve, look for cheap parts I think this will work for your money.
regards
Hans from Bavaria
Sunbeam Tiger MK1 with 357 strokerengine, really funny.