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I was looking on craigslist and found a 01 V10 engine with 85,000 miles on it that the owner pulled due to blown head gasket. he is asking $425.
If I got it, I would build the ***** out of it for reliability and power (I know the two don't often go hand in hand)
It already has PI Heads, which, from what I have found, is worth all of the $425.
Basic question is, What parts should I get to rebuild and should I bother?
First off welcome to FTE. Lots of good info here and in the V10 subforum (and other engine subforums) so read up and enjoy if you are new to the SD and V10. Even if you aren't I'll bet you still learn a lot!
Second as far as parts it hard to say. At a minimum you'll need head gaskets, head bolts, and the other various gaskets (intake, exhaust manifold, front cover, etc). Once you get in there you might find more damage.
For $425 it would be worth it if it's truly just HG job. Even if the head is bad you can get a rebuilt head on Ebay for $385 or so. I haven't personally used the few sellers (Odessa and Clearwater) on there but a few guys in the V10 forum have with good results. If you get in there and find more damage that you want to dump money into it you can probably still resell it for almost what you paid. Even if you couldn't sell it at all I don't consider $425 a HUGE finical hit but you might have a different situation.
A quality re-build will run you around 2,800.00. If your funds allow it I would just get a motorcraft motor. They are worth the extra money plus, you also get a 3 year unlimited mileage warranty.