All good points given here. What I would be considering though, is the cost differential between a good rebuilt THM400 and a high-performance overdrive. The 400 will handle just about any amount of streetable horsepower you want to feed into it, but will still be the same 1:1 third gear that you have now in the TH350, so you will not improve mileage with it. The overdrive trans must be built to handle additional hp and as seen in the link provided by Glenn, they are not exactly cheap. You have to sit down and figure the miles you will go with this truck, the cost of gasoline and the savings you would realize with an overdrive. I think you'll find that it might take a considerable number of years of driving to make up the difference in fuel savings between the THM400 and the 700R4. Now, there is a benefit in the 700R4 over the 400 in addition to the overdrive gear and that is the numerically higher first gear ratio that will provide a better launch.

It's sometimes a tough call when you start to modify your ride because of the give and take both ways. We want it fast with good mileage and that's tough to do on a budget.