Like sreckfu's951 said, the loose nut behind the wheel is the best place to start.
Chips / exhaust will only really give you 10-15hp extra MAX, and drivability may go down.
If you MUST mod the car, then I suggest focusing on the suspension: thicker rear sway bar, coil-overs (250# front, 150# helpers in the rear with stock torsion bars), are a good start. It may not give you more power, but it will help get that power to the pavement. You already have LSD, which what I wish my car had! <img border="0" title="" alt="[Eek!]" src="eek.gif" />
If you really want mad power, you need to sell the S2 and get a 944 turbo to play with.
Just my $0.42