Drivetrain

The racers of old loved their automatics and powerglide trannies.  The reason?  Big blocks make big torque.  If you unleash all that torque off the line, your car will just spin the tires until they wear through...  An automatic transaxle was much better at absorbing some of that torque load.  And since rpm's typically didn't get much above the 5000 range, the car was running at or near peak HP almost instantly.  Were there extremely fast manual transaxle muscle cars?  Absolutely!  But they usually had excellent drivers and/or 2 or 3 clutches standing by...

Enter the modern "sport"-compact.  Torque down low is, well, pathetic.  But we have the advantage of revving the engines to 7000 rpm easily, and even close to 10,000 rpm on some cars.  Since HP is a function of torque and rpm, our peak HP can occur long after torque begins to fall off.  That's why "driving by the seat of your pants," or shifting when you don't feel pushed back in your seat anymore, doesn't work for us.  Torque is what you feel on your "butt dyno," but HP is what gets you across the line faster.  Learn the difference and respect it.

Transaxle - For the Neons, there are two basic options for a manual transaxle.  One is a 3.55 final drive, the other is a 3.94 final drive.  There are some variations on each, but for racing purposes - that's it in a nutshell.  With the 3.94 final drive, the gear ratios are closer, meaning you will have to shift earlier (at a lower speed) than with the 3.55 final drive.  How is this a benefit?  First, you get up to the power band faster, so there's more "average" HP being put to the ground.  Second, when you do shift, the drop in rpm is less, and subsequently the drop in HP is less, also meaning the "average" HP to the ground is higher.  If you are drag racing and staying naturally aspirated, this is the way to go.

The turbo guys most often prefer the 3.55 final drive.  Why?  Because the turbo takes a little bit to spool up, and the higher you can keep the rpm's, the more boost you get.  So going as long as possible without having to shift is a great benefit - more time in the power band.

Autocrossers and road racers are somewhat split, but most still lean towards the 3.94.   It may seem like you'd want to minimize shifting, but having the closer gear ratios almost always gives you the advantage.

Limited Slip Differential - The open differential on a stock Neon applies power to both wheels, but will put more power to the wheel that has less traction.  So off the line, if your weight isn't perfectly distributed, the wheel that starts to spin just gets more power to spin.  A LSD applies pressure across the differential to help even this out.  It isn't the same as a solid axle or "spooled" axle, but a nice mix of both.  With a solid or spooled axle, both wheels get power all the time.  The downside?  Break an axle, hit the wall...

Clutch - The stock clutch was meant to hold around 135 ft-lbs torque.  In reality, it was seriously over-engineered and can handle at least double that.  Buying a clutch is another costly investment, so it's important you do it right the first time.  If your goals are a 600HP turbocharged monster, then by all means get the heaviest duty clutch you can find.  If you are just shooting for a 200 HP naturally aspirated sleeper, then you really don't need all that much more, maybe the "Stage I" or equivalent of whatever brand you go with.  In fact, if all you have planned is some basic bolt-ons and maybe a header, then upgrading to the PT Cruiser clutch should be more than sufficient.  But try not to think in terms of HP, since the clutch is based on torque.  In order to get any significant amount of torque you will have to increase displacement, increase compression ratio, add nitrous, or go forced induction. 

Axles - Like the clutch, the stock axles are only designed to handle so much torque.  While there are a lucky few that have raced on stock axles (even with pretty impressive HP) and not snapped one, they are the exception.  Once your little Neon has all the bolt-ons (header included), or maybe just a fairly decent turbo/intercooler setup, you need to think about upgrading the axles. You can buy a set new specifically for the Neon, or you can hit the junkyards and find good parts that work just as well for well under half the price.

Slicks - Street tires have three major downfalls: flex, traction and resistance.  Slicks have "wrinkle" sidewalls that help absorb some of the torque right off the line.  They flex, but don't break, and the torque still gets to the pavement eventually.  The rubber on slicks is a different compound that is stickier, so there is much more traction.  Finally, tread squishes, and in doing so increases the rolling resistance of street tires.  Slicks that are twice as wide as a street tire will still have less resistance.  Street-legal drag radials are a waste of money, in my opinion.  They wear out incredibly fast, and who wants to spend $300+ on tires every year?  They aren't very safe on the street, and some manufacturers have stopped making them because of this.  Plus they have tread, which hurts you at the track.  If you are going to run slicks, do it right and have a dedicated set.

Choosing the right size can be difficult.