Donor truck will make your life easier. Lots of little crap you can use from it. You can also save/use the harness as you see fit.
I did a 6.0 in mine. Put flat top pistons and a Brian Tooley Stage 2 Truck Cam. 4L80E Trans. Did my own tuning. With the stock 2.73 gears I got 18 MPG Highway and 15 MPG around Town.
I just swapped in a set of 4.88 gears and a Spartan Locker. Mileage hasn't dropped much around town, but I haven't been on a road trip with it since the swap. I'm sure it will go down though.
In my opinion, if I was building a daily driver, I'd use a 5.3 to gain a couple of MPG. If I was building it for power, of course get the added displacement if you can.
Whatever engine you choose, I doubt you'll regret it. The driveability improvement is so nice it puts a smile on my face every time I drive it.
Joe