Ok, i have now done my research, thanks to all here who helped me!  I have decided on what i am going  to do in replacing my '74.  I didn't buy my Vette for the economy, i did it for the body, but since i have to rebuild it, i might as well rebuild it the way that i want it.  Besides, if i want power, thats what my Red Vette is for.
   So,  I am going for fuel economy while retaining the spirit of a Vette.  Quit laughing, i think i found a way to get both.  I am going to get a 305 out of a junk yard, have it professionally rebuilt, and put it in.  I will be in for some work, however, I think.  What i am doing for mods are switching over to a HEI distribuitor,  Fuel Injection, and Headers through my true dual exhaust.  This should produce better fuel economy and the same or more horsepower with everyday reliability once i am finished.  And, i will have overcome any overheating problems.
   I know that I am going to have to rewire my ignition switch to undo the resistor, also replace my tach with a later model, having lost the gear drive.  The headlights I am going to have to go with "Killer Lights",  (Electric).  Lastly, i am aware that i will have to wire in my fuel injection harness computer, which will come from the donor car.   By the way, the donor car will be a late  80's  Firebird, eliminating  hood clearance  issues.
   Now my question: what am i forgetting?  What else will I need to do?

Seems like a heckuva lot of trouble to save a liittle fuel while retaing the "spirit" of a Vette. If you do a lot of highway driving and fuel is any issue, why not just change the gearing.  ranger32007-01-21 13:56:08

I agree with Ranger seems like it would be easier to change the gears and slide in an RV cam, an have yer heads done in yer xisting motor. That way those lil things ya mentioned like da tach, da headlights, da puter are only memories of trouble avoided. Not to mention it will save ya a few $$$ in da process.

If you're determined to replace the engine, etc., you may well find that having a junkyard small block professionally rebuilt is going to cost more than simply buying a new crate engine.

You may find buying a used fuel injection unit the same way may be a can of worms as well. Not that it can't be done and done well, but you may have a mess of wrong sized injectors, wrong ECU chip for the cam profile of the engine, other mismatched or missing bits, etc. I think fuel injection is the way to go, but I believe you'll be much happier with buying a new system.

In one of my cars (not a Vette), I found a crate engine was less costly and bought a GM Performance 350HO, 330hp crate engine, and had Edelbrock fuel injection installed. It came with all the parts, and Edelbrock provided a chip custom tailored to the engine and cam. The only drawback (if it is one), is that the system looks like a carbureted system...it doesn't have the "wow factor" that EFI usually has, but you can reuse a standard air cleaner instead of having the plumbing that factory fuel injection comes with.

There are other makes like Holley, Accel and others for fuel injection, I chose Edelbrock.

If all you're looking for is additional fuel ecomony, do as Ranger3 aid and change the gearing. You can also install a 5- or 6-speed transmission. A 5-speed would be essentially a drop-in. The 6-speeds generally require some transmission tunnel modifications.

BTW - there are HEI distributors available with the tach drive. They're not cheap, but they do eliminate the need to change the tach.

Ok... first off, i already did switch the gearing.  The 5 speed was scheduled for later this year, but with what happen, the motor moved up to a higher priority.  I still intend to do it, but not until next year.
   To match all the system:  I have a good contact with a junk yard, so the motor will come out of a accident car, thus hopefully running well when it died.  I will be getting the entire thing from the same car, all matched, for only $300.   I have quotes ($1400) from a reliable builder in the area to rebuild that motor, clean and check the fuel injectors.  So, the whole thing is affordable.
   Is the work worth the effort?  Well, as i said, i drive this Vette about 20,000 a year now, and would more so if it got better mileage.  My hopes is that by the time i am finished, i will get in the mid to high 20's freeway.  I drewled and dreamed of this car for over 30 years, and now i drive it every chance i get.  Just for work, its 54 miles a day freeway, church is 82 freeway miles a week, (thats not including city miles on those).  I intend to keep the car for as long as i possibly can, driving it every day i can.  By the way, the headlights i always intended to do eventually.
Itsdave925702007-01-21 08:55:43

If that engine and EFI are in good shape, sounds like you're gold. A few things for the EFI have to be done...find a good place to install the ECU, run the lines, install the electric fuel pump, etc.

Looks to be pretty much good to go.

Stupid question about the fuel pump.  Does it have to be near the engine or the tank?  I am thinking if it will fit, the ECU will go in the area of the headlights, i am considering behind the license plate (wires can always be extended).  Other quick question: While i have the motor/trans out, i am replacing the insulation in the trans tunnel, and the batter cable.  I am actually going to replace that with welding cable, lasts longer.  Anything else i should replace while i have it all apart?

The fuel pump should go back near the tank.. An electric pump is far more efficient pushing than pulling. It will also eliminate vapor lock.

Go ahead and replace the insulation in the tunnel while the tranny is out. Hopefully the new engine and 5-speed transmission will make for less heat anyway since it will be turning fewer rpm's, but it sure won't hurt and much easier with nothing in the way.

I'm not familiar with welding cable to know if that's a better thing to do than replace the battery cable with copper...someone else here may have a better idea than I do. I don't know if welding cable is a better conductor than copper cable or not. I think making sure you have the better conductor of current rather than the longer lasting. Maybe the welding cable is both...I don't know.

Do NOT put your ECM behind the license plate, or anywhere out front! Can you say "ZZZZAAAAAAAAPPPPPP"????
Sure, you may not PLAN on driving in the rain, or thru water puddles, but it happens. Also, it can get damaged by debris. Find a spot inside the cabin...it'll thank you later!
(Chrysler thought that putting the TCM for the PT Cruizer behind the bumper, in front of the front wheel/tire was a good idea, too. Guess what? It ain't werked out the way they thought!)

We used welding cable for battery power in our race cars/boats for years. Works great!

Fuel pumps ARE for pushing, not pulling. Pulling/sucking fuel has a tendency to aerate it.

   With the ECM inside the cabin.  What about that little space beside the battery that they have? possibly put a couple of good vent holes in it? I could run the wiring through the trans tunnel, under the insulation? 
Also, in pulling out the old motor, putting in the new one: Other than Fiberglass cracks, anything else special about our cars that i should know?  I do plan on pulling the trans with it.  Any other tips?