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It's not a chip, it's an ICP mod.... or as others have called it the 10K mod. It's simply a 10K resistor inline to the ICP sensor. It tricks the PCM into thinking that the ICP pressure is too low, so the PCM commands for more pressure. The result is a little bit more power.
The horsepower and mileage claims are absolutely rediculous in that ad. Realistic gains would be more like 40 hp, and zero gains in mileage. I ran a version of this back when I first got my truck, and it's just an ok toy to play with for about a day.
The problem with this is that you are adding more power without proper tuning anywhere else. You are not adjusting fueling, timing, or any of the transmission controls. So even though this module is cheap compared to an actual chip, it doesn't do nearly as much as a chip.
Do you really need gauges? If you don't tow or work the truck very hard you'll be fine without them most likely. Otherwise you're gonna want them. Even on a stock truck they are a good idea.
I woud say just keep saving. I always try to steer clear of the cheap and easy route. Sometimes it works, but you really have to do your homework and make sure it does before you do it. I would say yes on the gauges. If you get a high performance tuner you will, at some point in the trucks life, get the infamous "itch" to show your buddy, girlfriend, wife, or mustang owner how fast your truck really can go. At that point you will want to be able to monitor your exhaust temp at the very least.