Porsche Forum - Porsche Enthusiast Forums - this might sound crazy but....

" . . . I can't understand how someone could build such a big engine and yet have so little power . . . "

No offense, but this is the only thing you got right -- you don't understand.I don't know you, but I will hazard a guess that you are relatively young (of course, nearlyeveryone is relatively young to me) , don't have much engineering education, but are very enthusiastic about cars, particularly those types you and your friends have. Fine, but please, no fanatical enthusiasm here for one kind over another. All cars have advantages and disadvantages and it pays to learn to gain some objectivity: this way you avoid embarrassing yourself with sweeping statements that friends can prove untrue, and you are less likely to get spanked at the track because you really didn't give the competition its due regard.

The following points you stated not always true . . . :
. . . It is not physicaly possible for 5.7L to be more ecofriendly than the 2.5L engine . . .
certainly it is, eco-freindly is more a matter of design and catalysts than anything else - ultra low emissions engines do well mostly because of the placement of their catalytic converters closer to the exhaust ports than anything else, etc. And "big" slow-turning cylinders have tremendous advantages from an emissions/clean burn standpoint, if you use them for that.
. . . V8 is too heavy: no again, that is a matter of design . . .A 100 HP/liter engineweighs roughly the same per liter regardless of its displacement, but a 400 HP/6 liter engine does not necessarily have to weigh more than a 400Hp 4 liter engine, or a 400 HP two liter engine. The GM LS-series V8s are only "big" if you look at displacement. In every other way, they are small.
For a moment, forget about displacement, and think as an engineer does when looking at a new engine project: you have to design an engine to make a certain amount of power, etc.. If you are targeting a country where cars are taxed on the basis of their displacement (Europe, Japan) you want to go with minimal displacement and high revs. But if you design for the US or Australia, etc., where cars are taxed on the basis of weight and market value, you don't care about displacement that much: you look to getting the most power out of a certain amount of total engine weight. Here, GM is just about unmatched in the world (largely 'cause it has more experience at this type of design) - something not really appreciated by a lot of folks (except by just about anyone who pays attention at the drag strip)

GM chose to build a very big-displacement, very low-reving, "lazy"engine, it has a lot of displacement but because it is targeted at relatively low revs and power levels per liter, its block is very light: an LS3 (6.2 liter, 403-430 HP depending on the exhaust) is actually lighter than the original four cylinder engine in a 944. It uses pushrods - they have their downsides, but double overhead cams make for very heavy heads, and in a V engine require four times the number of cams, cam bearings, cam followers, etc. (not just more parts, more friction), and timing chains, etc. and they all add weighrt where you want it least -- at the top of the engine. And because they are at the top of the engine they make "packaging" difficult - the engine is taller by about 3-4 inches, and its its a V6 or V8, wider by about 4 inches, too.
The net result is that the cam-in-block, pushrod GM LS V8 has low internal friction at cruising speeds compared to any engine in its power range, and it is a very compact package -- short front to back and side to side and bottom to top, and very lightweight -- stock it weighs less than a stock single overhead cam 4.6 liter Ford V8 putting out right at 110 HP less, and only a few pounds more than the engine in a 350Z. It can take mods , either normally aspirated or blown, to only around 550 flywheel before the block gets too weak for long term durability. Then, you have to go to either LS7 castings (expensive) or the "custom" C5R (very very expensive) or an iron casting instead of aluminum (cheaper than stock) which is heavy (another 91 lbs), but it will now take up to 2 BAR of boost and got to 1300 HP -1600 HP at the wheels.
There are many great engines in the world. The Porsche 3.8 liter flat six is one of them. The LS V8 is another. Some of the Japanese fours are prettygood, too, and I have always loved the V6 in the last model Supra.But its best not too let enthusiasm for one blind you for another. the LS transplant strikes me as far preferred for the 944 because the engine is compact yet powerful, will fit well down in the car and well back, too, for good wieght distribution, has roughly the same weigh as stock so it leaves chassis dynaics alone, and there is a kit already, which makes like easy. And with the 6-speed's high overdrive, it will give outstanding fuel economy, too.