You could also go with an 88 conversion.

That said, teh cheapest way to get more power and performance would be to sell the XR and buy a sportbike/naked bike

 

For all things XR I would like to refer you to the following forum:
http://www.xr1200ownersgroup.com/site/forum.php

 

Basically nothing you can do to the engine internals. Pretty much already done from factory and no aftermarket engine parts available. Try the Torque Hammer pipe from the Netherlands with the ECM flash/map, however they do it, and a K&N air filter. I have the XR1200 Torque Hammer on order after trying slip-ons. Makes HP, low end TQ and not too loud. It's expensive at around $1000 but it seems to be the cat daddy of XR 1200 pipes. There is also a re-gearing option using Buell parts for about $200 that makes the bike more friendly for highway use(it has stock 883 gearing). This will bring the bike up to around 90-92 Rear Wheel HP. It still ain't going to outrun my 95" superglide but it will be much more fun to ride.

 

As far as the engine differences, from what i can see by looking at the factory service manual not many engine parts interchange. It has a completely different oiling system and EFI system with 2 twin cam type oil pumps and the right side cover that says "sportster" is just a dummy cover.

 

Call the guys over at NHRS and see if they've done any work for an XR1200 yet. I'm sure you'r not the first person to want to do some engine work on the XR. I assume you would be able to do a jug/piston swap to a 1250, but then you'd need to look at doing head work and new cams. Sound like if you are sticking with the XR, you are going to be doing A LOT of engine work on a new bike.

 

The Engine, is a Buell engine that HD uses in 2008 for the first time.
Try to use a Buell workshop manual for a 2008-2010 engine and you will see the resemblance.

 

Buy a Buell Firebolt. Meet Buttercup, ready for action!

 

or let it run like a Buell

 

Yup, Buell XB; 10-15hp more out of the box, 125+ lb lighter, better suspension, better brakes, sharper handling, 15-20mph faster on the top end, ect, ect.... The XR was a HUGE step backwards as far as a sport standard goes from the XB. Of course, the XR has "heritage".

If you're looking for a sporty standard the XR is very nearly the worst performing one out there. I hope you're prepared to spend a LOT of cash to bring it up to par with the rest of the field and even more to make it run with your sportbike pals (unless they can't ride for crap, then you have a fighting chance).

 

Right out of the box, the XR is not set up for racing, it is set up for the common person to ride on the street. You will spend alot of money getting it track ready as it does with any other stock bike. There has been an XR circuit in Europe for a while now and it seems that they perform very well (with the proper mods and set-up).