You'd only need an 850 gearbox if you were using the engine from an 850/850 Sport - that's one that spins the 'wrong" way - using one with your 127 engine would give you four reverse speeds and one very low-geared forward gear - terrific 0-15mph times but no good otherwise. 850 gearbox is quite a bit heavier than the 600 one - obviously stronger and with a largely cast-iron casing, rather than aluminium (in Norway you should be encouraging the use of aluminium!) but I'd stick with the 600 unless your engine gets too powerful for it. From memory, you'll have to change the centre plate on your clutch to get splines that match the input shaft on the 600 box - I seem to remember they're much coarser on the 600 than on a 127/850 clutch plate.
You can do a certain amount to open out the single port on top of the 600/850 cylinder head but this is a severe limiting factor on that engine. The bottom end and other revolving parts will take fairly high rpm but power falls off because of the limited intake possibilities. I always thought that supercharging was the way to go to overcome these limitations but never tried it (went to a 500 with BMW flat twin engine instead). I fitted a single-barrel 40mm Solex carburettor on my 850cc 600 with Giannini cam and other tuning bits, like the Abarth 850TC. Same carburettor as was fitted in pairs to the 2.4-litre Jaguar saloons of the time with different jets, but could be a possible source of a carb. 12-to-1 compression ratio seems much too high, I doubt if there's any benefit from going over 10-to-1. The 1050cc 127 engine is a completely different type - built in Brazil if I remember correctly, but there are no common engine parts. To be honest - and not wanting to discourage you - if you're asking this sort of question, are you sure you should be undertaking major mechanical modifications on a car?
By the way, where are you in Norway? My brother lives in Voss.
