A built GSR motor is fully capable of making plenty of power--the extra tiny bit of stroke that you get out of the LS bottom end doesn't really net you much of a gain in the end. Besides, you can punch a GSR motor out to 2 liters by having it resleeved and bored out to 85 mm from the stock 81.

This is a very general question with no really good answer. Instead think about how much power you want to make and how much money you want to spend to make that power. Personally I would buy the GSR because you'll drive around with the nicer motor to start with, and usually these supposed project ideas take longer to get off the ground than anticipated.