If you really want to daily drive it, keep the 700R4 with the lock-up torque converter or find a manual tranny with over drive. What's the predominant mph where you'll be driving it? I'd run 4.56 or lower gears depending on mph you want to run with 38" tires.
I would figure out tire size and gearing first. I honestly would run 35's, but it's your truck. Make a few changes to beef your 700R4. Buy vortec heads and a roller cam that pulls from idle to 4500-5000 RPM. If you go with the bigger is better theory, you'll most likely have poor driveability. Stay with a 600 cfm carb, get some shorty headers and dual exhaust. Some electric radiator fans will help MPG. You can switch to a manual tranny later if you really want to. There's a nice vortec headed engine with roller cam for about $2000, then add a better cam that these other guys recommend, if you don't want to put the parts on yours. Like Vile said, if you don't plan your package to work together, you'll be unhappy.
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