Don't discount a late (year 2000) classic UK or euro Turbo..

Firstly I'd decide what power/performance you're after and go from there.

I've had most of the classic models and the one I've had the longest has been a UK spec turbo. I have just modified mine with a VF35 from a 2003 STI, power FC, walbro and just had it mapped Monday by Simon aka jollygreenmonster and it really shifts now. I'd estimate 320bhp (going by previous cars I've owned) with probably not far off that in torque.

My favourite engines on the Imprezas are either the version 2 engines (95-96) or the version 5/6 UK engines (99/00) The 97/98 just don't feel great to me and usually sound slappy from cold. I currently also have a version 2 STI RA with the CDB and it feels like granite, it sounds perfect from cold and feels strong.

I've read lots over the years and owned many STI's and IMO the classic STI engines (apart from pre 96) don't seem all that great to me.

Most people will reccomned an STI of some sort because it's got better suspension, more power etc but my advice would be to look for a decent low mileage year 2000 UK or euro 2000 Turbo with some choice mods. Most of them have things like suspension changed etc anyway. You can do ecutek remaps on the v5/6 cars too and an exhaust, filter and remap will get you 260/270bhp and similar torque or (like I have) add a VF35 (cost me £200) which fits straight on with no mods in the mix and you're looking at 320bhp.. stock injectors on v5/6 cars are 440cc and these and the stock v5/6 intercooler will see you to almost 350bhp without being changed.