I'm also new to 996 ownership and tuning but I'll can give you the benefit of my first few weeks looking into it. (plus a bit of background info for someone who doesn't know the cars well)
The car has an extremely tough and well designed engine. It seems, budget allowing. The sky is pretty much the limit and you get a lot of advantages as standard that you need to upgrade to with a Skyline to get to the bigger hp numbers. Firstly I'm not sure whether the rods are the same, perhaps someone can confirm but I believe otherwise the engine is the same one used in the 1998 GT1 le mans car which was designed to run 750hp at race pace for 24hrs. The design is certainly the same, Porsche didn't trust their new water cooled unit for the GT3/2 and Turbo models so given the relatively small production numbers it was cheaper to use the watercooled design they had already than to develop another engine to suit the purpose.
I read somewhere recently that the rods are only good up to 580hp but that doesn't sound right to me and RUF don't list rods as included with any of their packages. Even the most severe examples running well over that figure. RUF are not the kind of tuner to skimp on something that is necessary so I am assuming it is not true.
The X50 later spec 996 turbo and GT2 share exactly the same engine with K24 turbos. Only the early turbo is different with smaller K16 turbos. The car runs extremely modest boost levels to achieve the standard production figures (between 0.6-0.7bar on the 420) this means the figures for just a chip are quite impressive. DMS quote 520hp for the K16 equipped cars and 550hp for GT2 and X50 models.
I'm not yet sure what limits it to those figures; whether it's the size of the turbos, the natural caution of tuning companies working with these cars or something else like cooling but it makes sense to me that its probably down to the size of the turbos which would have been designed down as small as possible for the intended output to reduce lag.
Secondly I understand the temptation to go for the GT2, it was where my thougths first landed when I started looking at the 996 but I would strongly recommend you look into the turbo and perhaps take a test drive on a dry day. The 4 wheels drive system on the car is a real gem and I think it ads far more to the car than it takes away (many magazine reviews of the time agree). It's very RWD for a 4wd car, perhaps sometimes too RWD as it lights up the back wheels very easily with PSM off and ocassionally even with the traction control on. In fact the 4wd only really starts to ditract from the driving experience and feel more like a traditional 4wd when its wet.. but then you get the advantage of the confidence and pace that comes with it.
Here is an example of how not to treat your car but gives a good indication of the 4wd ballance compared with something like the Skyline which takes some space to get into a tight circle.
http://www.youtube.com/watch?v=Q84jfWC1mT8
There was very little in it for me as to whether to get a turbo or a GT2 but if I were to choose again knowing what I know now I'd still take the turbo. For one thing the early carbon ceramic brakes (standard on the GT2) are less suited to road use than the standard steel items which already feel like they need quite a lot of heat in them to really work efficiently and really have no problem at all with fade. My only other temptation would be a GT3 but you have to take a big hit in straight line pace and you have to consider the types of owners the two cars are likely to attract. My turbo at 45k miles feels like it left the showroom yesterday, I can only imagine and stories from owners on piston heads agree that you'd be hard pushed to find a GT3 that has had an easy life!
As for how far to tune your car, the standard car at 420-450hp is a seriously car by any measure. In cold weather like this the acceleration even of my 420hp car is savage. They are obviously strong horses! For the peace of mind factor, knowing you can still work the car hard without fear of something breaking and the spiraling cost of tuning a car further I have come to the conclusion that 520-550hp delievered with such a wide rev band would be more than enough for anyone and I can't imagine a lot in the real world that could challenge you for pace either.
Whatever you choose to do I will be very interested to hear other peoples input into this topic and also to hear what comes of your story so please do report back here and let us know as things progress.