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I had the K&N dropin in my 05 corolla xrs, and I liked it. It made a sweet whistle sound at high rpms, I got 2 more MPG consitently, and the engine climbed rpms faster. I doubt you gain HP but the engine will definately breathe better.
If you really wanna get good feul economy, get a free flowing muffler. The stock XRS can has about 20 lbs of baffles inside which really hurt your performance. For $150 you can get a name brand (flowmaster, magnaflow....) universal muffler spliced onto your stock 2" piping. I was getting 38 mpg with the K&N dropin filter and my flowmaster muffler. But then I got an Injen CAI and my mileage dropped to 30 mpg because I was burning a lot more feul with all the air I'm sucking in now.
You'll like the filter, but the most bang for the buck with the XRS is a new muffler, which won't void any warranties either (except for the old can that you throw away anyways). Remember you don't need a "catback" because we already have 2" diameter piping from the factory which is plenty for a 1.8L NA motor.
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2005 Corolla XRS
Vibrant exaust, 30% tint, K&N Short Ram Intake, HKS grounding kit, ES motor mount inserts, TRD Springs, Koni Yellow shocks
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