I have a 1998 honda civic DX wich i want to set up. as of now i only have an intake & planning to put headers. from there, who knows what i can put. i was looking for headers (street leagal) but there seems to be none. do you guys have any suggestions?

Yes, dont waste money on that motor. The only way to make power from a
d16 is to turbo it. Other than that you can swap in a bigger motor such as B16 or B18. Until then you should instead fix the rest of the car. suspension etc. D series do not respond at all to NA modifications. They are nice to turbo though, needs to be built if you plan on doing more than 200hp.

So this means it's better to get a new engine? but if i swap my engine, the car will become illegal, right? I was looking for a K20 series motor or a B16. Wich one is better?

depends on the state. K20 and B16 are totally different motors. B16 is pretty cheap around $2,000 or less depending which model (Type R is around 2,000 or higher) and obviously is a 1.6 with power anywhere from ~140-160. Great motor to work on, but you might as well spend a bit more and get a B18, better power, more potential. B18C1 is GS-R motor with about 150 @ the wheels, good for turbo. B18C5 is type R, costs around $3500 I think. 180 at the wheels, better for NA. K20 is the newer motor 2.0 Liter producing around 200 hp I beleive. Very expensive, but responds well to bolt ons. Tight fit in most Civics. Check this link http://www.automotiveforums.com/vbulletin/showthread.php?t=19176