Can't believe nobody else mentioned this..
Are you sure it's a an LS VTEC? VTEC only came in the GSR's and the Type Rs, not in the LS. While it is possible to modify an LS with a VTEC head, it's a complicated procedure and I doubt a "blonde" who sold you the car for $3k would have had one. Pop your hood, and if the valve cover is flat black, you have an LS. If it says "DOHC VTEC," then I stand corrected.

Anyway, if you have a regular LS, I say turbo. It would probably be a bit cheaper than swapping in a B18c, and it will definitely give you more power. Like someone else said, just make sure to check out your engine beforehand to ensure that it can hold the boost.