1. Use premium gas... MR2 turbos get 27 mpg on the highway, and 20 mpg city
2.yes that is true, UNLESS you already have a donor car (which you do), in which case it would be slightly less expensive to do a jap swap (4500-5500 depending on what year engine)... and i would know because i just paid for a swap
3. 120000 miles is a bunch... see if the car you are thinking about has proper documentation of services like timing belt, turbo replacement/repair, and regular oil changes.
4. Do a swap (
www.mr2warehouse.com) and get a lower mileage/higher performance engine (and all its necessary parts of course)
ps - im not a "pro"