If your having to make your headers go big, the 1 5/8's X 3 will be fine. You''ll more than likley end up going bigger with the motor anyways since your racing it so why not have the bigger better headers already. Just makes sence.
Anytime you reduce combustin chamber volume and squish you will see a increase in torque and horsepower, now how much is debatable.
It really depends on the cam - high lift / long duration cams love compression, just make sure you check piston to valve clearance afterwards.
Goodluck>Cp