I hesitate to modify a 305/307 much at all, really.. Chip or no chip.. Its just not worth the time and money. You will have more into that 305 for less performance than you would just going 350.
In my case, the 305 had 51k miles. Now its got 62k. (I don't buy cars to park in the garage, I buy them to drive).
But the 305 runs like a top, so I just decided to let her breathe.. headers, duals, and an Edelbrock Performer w/EGR intake, and just run it. It's fast enough for me, and sounds good. Is it the fastest thing on the planet? Oh hell no..
I Mainly chose those upgrades because they would bolt onto a bigger SBC (say, a 350, 355 or 383) should I go down that road.
Big Fat Juicy goal is to build the 200-R4 to handle about 500hp, 3.73 rear, and a Pontiac 6.6L 400 up front, slightly modified.. Its the same set-up I had in my 1978 Trans Am. Was quite the little runner..
But a more realistic goal would be some sort of SBC if/when the 305 goes t*ts up.. But that doesn't stop me from doing, say, the rear end while running the 305.. or the 200-R4 while running the 305..
-Gonz