Hi Swate!
If you ask me, you can get more Power AND better mileage out of an engine with a few not very costly modifications. Get an Edelbrock Performer 600cfm carb with a Performer Intake, Open Air Filter and a set of good Headers. That wil give you about 20 or 30 more HP over stock, and a good lot of low end torque becasue the engine can breath better. And the mileage goes down because the Ede makes a much better mixture than the Rochester Quadrashit thingies. Might cost you about 500 bucks all together, won't fetch you a tire-burner, but you will defintely notice a difference in performance. I did those mods to the 350 Stock engine in my G20, runs far better now and uses less (I have other problems). What's most important is to set everything nicely. Valves ought to be adjusted well (NOT with the engine running, do the real thing with hand-turning and so on, gets you a lot exacter, and the more equal your cylinders are set the better the engine will run), and the carb will need the right set of needles, rods, springs etc. for your vehicle and driving habits. If you want real power, the next step from there is a new cam, but from now on your mileage will go down.

IMHO the sequence for tuning is (please anybody correct me if I'm mistaken):
-Airfilter
-Carb
-Intake
-Headers (and high flow exhaust systems)
-Cam
-Heads
-other block stuff (boring over, pistons, crank etc...)

If you want to build an engine to your specific needs get as many different opinions as you can, think of your pros and cons and try to build your engine with harmony. Just putting in a new cam will make your Power go up, but it will also radically increase you consumption. Add a few other things to match the cam and you'll get good power, better running conditions and your fuel consumption will stay within the green. That's my opinion.