[5_LiTeR_EaTeR]

I don't own a Prelude. Nor do I own a Turbo car (YET). But i can answer your questions.

1.) Any turbo setup is good as long as it works and is reliable. Most people just go buy kits such as Drag, Fmax, Greddy... Etc Etc...
2.) If you are going to be boosting over 7 PSI I suggest you build the bottom end before you blow it. Companies such as JE and Arias make very good pistons and many people use them because they are very reliable. As for Rods Companies such as Eagle and Crower make good rods even though they make both very nice pistons and rods for you can just go and buy a bottom end kit. Now if you plan on doing any boring or machining mods thats another story.
3.)With the more boost you will want lesser compression such as 8:1 or 8.5:1. Boost and Compression - pick one of the 2 not both. With boost it will raise your compression rating and you risk the chance of pinging the motor.
4.) ALWAYS WITH A TURBO RUN 93 OR HIGHER OCTANE! Turbos produce heat, fuel burns and with that you may get pre-detonation of the air fuel mixture. the octane rating is nothing more than itrs vulneralbilty and proness to predetonation. The higher the rating the less prone it is to predetonation.
5.) You decide how much boost is good for you. overboost it you blow your shit. With a built bottom end and lower compression you should be able to push high numbers such as 15 and maybe even 20. Wicked sh!t.

I hope that helps you and you make the right choices in setting everything up before you go and blow your shit up. Theres more to a turbo than just the turbo. People go around saying "yeah I am gonna put a turbo in my car" when really half the people saying that have no clue wtf they are talking about. I tell them have fun blowing your shit up son when I know they know nothing. Have fun boosting, boost away! GOOD LUCK!