johnnyutah,
what was mentioned by the previous posters is all correct. you won't go wrong in using their thoughts. however, because I am familiar with your point of view from 5 years ago (ie, "Lack of knowledge"), there are a few missing pieces of information that will also help you. Things they didn't mention perhaps because it was assumed to be so obvious. One of the best things about the Gbody is all the interchangeability of parts. Read my bullet list below and any followup clarifications made by more knowledgeable forum members.
Suspension parts:
For the most part the rear axle is, IMHO, the fly in the vaseline. There are several ways to fix it as previous posters pointed out. A "great" fix will not be cheap. Depending on whether you plan to hotrod it, dragrace it, just drive it, that will dictate your rearend choice at what horsepower levels.
dragrace : don't even think about it, replace the 7.5" 10bolt, preferably with a Ford 8.8 or 9"
hotrod it : if you can afford to upgrade it ($$$), do it, either by replacing the rear axle or at least the rear gears
just drive it : it'll be fine but replace the rear gears if you can, the butt-dyno can tell the difference
Here's where the really cool part comes in; each Gbody came with it's own selection of suspension performance parts that were partially shared with other Gbodys. You can either get those parts at a junkyard or get them from one of the forum members who sells them. Each one of these parts will absolutely improve the handling of your GMC Caballero (aka El Camino). Since the Caballero came with practically nothing (like the El Camino), it wouldn't hurt to acquire them all.
I may have missed one or two but these are the parts that come on Gbodys alone.
Jounce bars
Monte Carlo bar
Radiator crossbars
Firewall to fender bars
Fender to radiator support bars
F41 front and rear anti-sway bar
quick-ratio Monte Carlo SS steering box
There are some other things you will want to do, or have done
-unless you buy aftermarket replacements or change your rear axle, modify the rear control arms by welding on plates to prevent them from flexing
-install a replacement steering shaft from a Jeep
-install a true dual exhaust but this will require modifying/replacing the transmission cross-member
Now, due to beauty of interchangeability from OTHER GM parts, you can do the following:
-replace the whole front spindle/rotor and disc brake calipers with those from a junkyard 1998-2005 4dr 2WD Blazer
-you can also replace the rear drums with the rear discs from the same Blazer. alternatively, leave the drums and simply upgrade the brake cylinder to that of an S10 pickup truck; it's a larger bore and applies more pressure for braking
-swap out the 7.5" differential gears from that of another 7.5/7.625" rear, like say, that from a Camaro. however, be forewarned this is not as straight-forward as it looks as most Gbodys had 2.4 or less gears and there is what is called a Series 2 and what is called a Series 3. this upgrade is best left done by a professional.
As you can see there are lot of mechanical upgrades that can be done and fairly cheaply at that. Just to blow your mind, there are also a number of body parts (front fenders, doors) that you can swap out, but that's a different thread/subject for another day.
All corrections to this post by more qualified forum members are welcome!
