In the pic below is there any reason the turbo could not be in the location of my collector? All the kits have short headers but this, I believe, is due to packaging requirements...

Also, for reliability I don't need a huge amount of boost... 190hp would be great. 5lbs? I also keep the rpm's from 7000- 12,000 almost 100% of the time, can anyone suggest a model (GT15- GT28)? Will an intercooler be required? Race fuel?

http://img.photobucket.com/albums/v11/carnut169/newheaders.jpg

Short headers are used to position the turbine as close as possible to the exhaust values for maximum efficiency (high heat/high exhaust expansion). You could mount it further down steam but the only way to determine to the performance loss would be to try it. Some after market automotive turbo kit have moved the turbos downstream for design reasons with pretty good results.

You can mount the turbo wherever you want, but as GaryEvans said, you will lose performance (yes and no) Turbo performance comes down to one thing, and one thing only.... TUNING... you will have to mess around with turbine wheels and housings becuase you will lose exhaust flow the further away from the exhaust ports you go. So you have to get your turbine wheel to spin up within the same RPM range as it would up close to the engine. Then you will also have to mess with your compressor wheel and housings becuase you will have a longer distance to carry the boost by the time you get to the air box.

Scott