you're a fair bit younger than me, but if you mod properly AND go to a good company, insurance isn't a killer.
I'm running over 400bhp and I pay about £600, but this is fully comp, with class 1 business use, 25,000+ miles a year AND an ML90 conviction (look it up - damn Welsh coppers!)
Sammiboo - what do you mean "why would you want to take it to 300-500bhp?"- there's simply no such thing as too much power
oadamo - there's a VAST difference between 300bhp and 500bhp
300bhp can be done (properly) for about £2,500.
400bhp will need closer to £7,500, plus you'll need better brakes and chassis to handle it.
500bhp will need about another £5,000 on top of the 400bhp option
Its still not bad value - at 400bhp, you will have a car that's cost about £10k - £12k that is capable of 0-100 in less than 10 seconds (that's Ferrari 360 and Lambo Diablo territory) AND will do 30mpg average (40mpg if you try very hard)
However, lets be realistic, it will still be a Fiat