Hi Stanny,
It really depends on how much power you plan to try to produce from your engine. The main reason for going to a larger turbo is to be able to significantly increase power output. The stock turbo has been shown capable of producing well over 200 HP. Those who have gone to larger turbos have even higher goals, 250-300 or more HP. At some point, the small turbo cannot move enough air to feed the engine. Another reason for replacing the turbo is an attempt to reduce lag, maybe by going to a ball-bearing turbo to replace the sleeve-bearing original. Of course, a third reason is that your stock turbo is knackered and has to be replaced anyway.
Boost can be increased in several ways, up to a point, by overriding the ECU's pre-programmed boost control. The simplest and safest way is to use one of Alan's Mountain chips. There's tons of discussion on the board about these. Another is to use a manual boost controller (either the "controlled leak" kind or a separate, programmable controller. These are also discussed on the board. In any case, the overboost fuel cutoff is a safety mechanism designed in the ECU. Once the MAP says boost has gone to 1 Bar, the ECU immediately shuts off fuel.
As you point out, the stock fuel system runs somewhat rich when out of closed-loop mode. I understand this to be a safety precaution to provide a little extra insurance against detonation/knock. Knowing that, it is possible to increase boost safely, to a point, with the stock system. That point is, nominally, 1 Bar boost, because above that point the stock MAP sensor delivers no more useful info to the ECU and the ECU doesn't have calibrations for higher values, anyway. There are two flavors of ECU setups on the Elan, with and without oxygen sensors. Without, the ECU relies on a pre-calibrated table to tell the injectors how long to stay open at a given RPM and MAP reading (and maybe throttle position). Any change to MAP sensor or injectors will result in an uncompensated change to the air/fuel ratio. With oxygen sensor, the same is true under acceleration, however, idle and light-load conditions allow the engine to enter closed-loop mode. In this mode, the output of the oxygen sensor is used to adjust the fuel injectors to maintain and "ideal" ratio, improving economy and reducing emissions.
To boost beyond 1 Bar, the fuel system must be altered in one or more ways:
Exhaust: restrictions in the stock system will ultimately limit output; the precat and the flattening restriction in the pipe over the prongeron are the two biggest restrictions, followed by the main cat and silencer. Some folks knock the catalyst out of the precat container, others replace with a custom downpipe. Some remove the main cat. Some go to a larger exhaust diameter. In addition to greater flow, reduced restriction has the advantage of allowing the turbo to spool faster.
Injectors: 330cc/min at stock pressure can't flow enough fuel for boost above 1 bar at full throttle. You must either increase fuel pressure or increase injector size.
MAP Sensor: only delivers information up to 1 Bar boost. At that point, it reaches max output voltage and further increases in pressure deliver cannot be sensed. A 3 Bar sensor changes the relationship between pressure and output voltage. While not exact, think of it as indicating only 2/3 the voltage of the stock system at a given boost. This has the advantage of effectively eliminating the fuel cut defender; by the time the boost reaches the fuel cut voltage, your head gasket will already have blown. It also has the disadvantage of causing the ECU to reduce fuel flow to about 2/3s of what is should be if you keep the stock injectors.
ECU / fuel metering: since the stock ECU uses fixed value tables under most performance conditions, you either have to trick it to give the behavior you want, or simply replace it. On the board, some have replaced with Haltechs, others use (or plan to use) Megasquirt. If you keep the stock ECU, you can get good results if you balance the changes to the MAP with changes to the injectors.
The most common changes begin with improved exhaust and intake airflow, followed by either a) Mountain chip or b) manual boost controller. For >1 Bar operation, the most common change is to use a 3 Bar MAP sensor and balance it with 550cc injectors. The MAP sensor tells the computer there's less boost than there really is, so the computer pulses the injectors to a lower flow rate... but the bigger injectors deliver more fuel per pulse so it (mostly) balances out. In closed-loop mode it balances very nicely; open-loop it's a bit rich. The major drawback to this combination is, the built-in overboost control is bypassed. Finally, a larger turbo can keep the higher boost pressure at high RPM, making ultimately more power.
This is a high-level overview at best, but it gives you a summary of the various approaches available to us.
Happy Elaning!
Doug