As per every performance-related mod there are trade-offs involved: so you will need to work out at which end of the spectrum you eventually want to be i.e. "road burning rocket" - with consequentially lower service life and higher costs, "steady dependable reliability with a bit more poke than standard" some higher costs but with your own "flavour" - or "largely stock but tweaked"
I'd suggest the following:
1) If you haven't already, have your driveline thoroughly checked over. It's no good spending money on mods only to have your gearbox fail or to lose all the benefits of a 5% power increase through a parasitic drag caused by incorrectly tensioned bearings. I would also suggest getting the brakes thoroughly inspected and making sure they are working as well as possible.
2) Have your engine checked out by a mechanic who knows his stuff with the 12ht. This isn't the ordinary 4wd or toyota mechanic - it needs to be someone who can check the injector spray patterns, overhaul the pump, test all the pump pressures and test the compression on a diesel engine. Ideally it should be someone with a rolling road; because you need it tested through the rev range. I know this sounds "boring" but these engines are getting old now so getting the basics right is important. Also you need a baseline for your build.
3) There is a body of evidence in relation to the compression rings on these motors - they are amongst the best motors that Toyota has ever made. However, the pistons were manufactured with a softer than ideal seating area for the top ring. This means the natural cycling of the engine causes the rings to wear this groove to the extent that, after some time, they will become loose and score the bore; eventually jamming the engine. The evidence appears to suggest that this occurs somewhere around 350,000km. However, in vehicles that have spent a long time idling (e.g. Japanese imports) it can be shorter.
Prior to spending cash on performance mods a good long-term measure is to have the pistons swapped out for new units manufactured with better metallurgy in the ring seating area. You can do this relatively inexpensively if you catch your engine before it damages the bore. This way you can often leave your crank shaft in place and just replace your shell bearings and pistons/rings. This is much cheaper than a full rebuild and you end up with an engine that is good for a service life of 1,000,000km if it's treated well.
4) While you have the head off it's a good idea to have it professionally cleaned port-matched and have a valve job done. This is in the "small gains" department by itself and you can't get anywhere near the gains you get with an equivalent petrol engine, however, it allows other work down the track to be much more effective.
ok somehow mud has shrunk my text.......going to need a second post!
Ironbark