If you are looking to add serious power to your Mustang, then installing a 'Power Adder' is undoubtly the easiest solution. The two most common power adders are Superchargers, and Nitrous Oxide Systems. In recent years, more and more mustangs have emerged with Turbos installed... with astounding results. Each of these three power-adders has their own benefits, and drawbacks- so please read on and choose carefully.
All of these power-adders work on the same basic premise, the engine combines air & fuel... and then sparks it. The power your engine makes is determined by the strength of these explosions.
So in order to make more horsepower, you need to find a way to supply the engine with more air to breathe (and then add more fuel), and viola... more power!
Each of the following does the above in different ways.
Superchargers are probably the most common form of power adder for mustangs, because it is a relatively easy installation... and the power is always there for you (unlike nitrous). Superchargers come in two basic forms (most of the time), the most common aftermarket supercharger today is called a Centrifugal Supercharger, shown below:
After the centrifugal supercharger, comes the roots type blower. A roots blower is the type of supercharger used on the 2003 Cobra, and the Roush Stage 3 Mustangs.
Superchargers draw their power through a pump attached to your cars belt drive (just like any other accessory, ie: Water Pump, AC, etc...). It works on the basic premise that your car already has an existing belt/pulley system, which can be harnessed by adding a new accessory pulley which pumps air into your engine as the belt spins. Almost every mustang has aftermarket mustang supercharger kits available which include everything needed to supercharge your mustang. (pictured below)
Nitrous Oxide Systems are the absolute cheapest way to add large amounts of horsepower, period. With a basic $500 kit, you can easily add 75-100 horsepower, and have it installed in one day. There are undoubtedly many advantages to installing a nitrous system in your mustang, but there are just as many drawbacks.
The most obvious drawback to a nitrous oxide system is the fact that the power is not always on, and the tanks must be refilled. The most obvious advantage is the huge horsepower/dollar ratio.
The way a nitrous oxide system works is simple... Normally your engine just sucks in normal air from the atmosphere to burn, when you have a nitrous system installed in your mustang the amount of oxygen produced by the N2O is significantly increased, hence a bigger explosion- and more power.
Nitrous kits come in two basic forms... a 'Wet' kit, or a 'Dry' kit. The difference between the two is simple: A 'Wet Kit' injects additional fuel and nitrous into the engine; while a 'Dry Kit' only does Nitrous. For this reason, most tuners beleive that wet kits are the most safe option. (but with the proper tuning, a dry kit can perform just as well). Another feature of Nitrous Oxide system is the ease of changing how much of a power boost you need... all you have to do is change a nozzle and you can range it from a 30 horsepower boost, to 250 horsepower!
Now we will move on to my favorite section, Turbochargers. In recent years more and more Turbocharged Mustangs have been appearing, and producing astonishing results. A Turbocharger works similar to a Supercharger in that it spins & pumps additional air into your engine allowing for more horsepower... but turbos have one distinct feature which set them apart from any supercharger.
A Turbo consists of two housings: the Compressor & Turbine.
The reason why Turbos are more efficient, and more capable than Superchargers in because in order to drive a supercharger to make its power, it must steal energy(horsepower) from the engine in order to make itself turnover. On high-end applications this can yield 100+ horsepower losses compared to a similar turbo system. A Turbocharged mustang escapes this problem because it is driven by un-needed exhaust flows to drive its 'pump' (compressor).
By using the exhaust to spin the turbine, all power gained is essentially 'free'... and it is a much more efficient design for car (in fact many experts wonder why all car manufacturers aren't using turbos more often). As the exhaust enters one side of the turbo, it spins the turbine inside- which is connected via a shaft to the other side... the compressor. Once enough exhuast is flowing through the turbine, it will spin the shaft connected to the compressor portion which will then create boost which is routed into the intake of the engine (sometimes through an intercooler first). And Voila, Free Power. Here is a basic diagram of a Turbocharger.
Since turbos work off the extremely-hot temperatures of your exhaust, turbo systems tend to run slightly hotter than the other power-adders.. This can be easily be corrected by an Intercooler, and an aftermarket radiator. The only other drawback of Turbo systems for mustangs is they tend to be more expensive than supercharger kits. (but the additional power is worth it!)
Altogether the best all-around power-adder is a Turbo, simply because it is capable of producing the most horsepower, and works the most efficiently.