Hello Sharan,
Any sort of exhaust that is more freely-flowing will not do any harm to the engine. However if the exhaust is far too large in diameter, then you will get no additional performance and there may even be a performance decrease. In particular, the way that the two pipes leave the manifold (as standard) and then combine (below/behind the engine) is carefully-calculated to increase the efficiency at certain RPM (the pulses from cylinders 2 & 3 aid the pulses from cylinders 1 & 2). A performance header system (we call this 'extractors') should be designed in a similar way.
The standard system on the 999cc FIRE Unos that I've seen also has only one muffler/silencer, which combined with the dual downpipes makes, in my mind, quite an efficient system considering that the engine only has 45bhp.
I believe that the upgraded exhaust systems are more useful for turbocharged engines where the free-er flowing exhaust helps to maximise output of the turbocharger. That is why (I think) my Uno Turbo happens to have a fairly large pipe diameter (2.5") all the way through - it was this way when I bought the car - the downside is a thundering, booming noise inside the car when the engine is under load. There wouldn't be much point in having this noise if there is no performance benefit.
What I'm saying is that I think it might be a waste of money to fit an over-large exhaust system to a 999cc FIRE - make sure you talk to several specialists to find out exactly what size they recommend - perhaps one or two sizes larger than standard, but I doubt that 2.5" is necessary or desirable. And definitely, if you're going to increase the pipe size, do it right the way through - no point having a huge tailpipe if the rest of the system is standard...
Personally I feel that modifying the exhaust should be done at the same time as other changes to the FIRE engine's camshaft (valve timing - the camshaft is very restrictive as standard and the engine peak power is under 6000RPM - racecar engines have peak power nearer 8000RPM) and carburettor/fuel injection system (again, the standard single carburettor or single-point injection is very small). If you do only one of the three, I think you're unlikely to see much benefit. But I could be wrong.
As for engine oil, the original grade is 15W40. I believe that a semi-synthetic oil of 10W40 is sensible, such as Castrol Magnatec (I'm sure there will be a Shell Helix oil that's semi-synthetic 10W40 as well). That gives you some advantages of synthetic oil (e.g. better cold-start protection, theoretically better efficiency as the oil is a little bit thinner and easier to pump around the engine) without the expense of fully-synthetic oil.
How clean is the inside of the engine? (you can tell from looking in the oil filler with a flashlight to see whether the valvegear is blackened). If it is very clean and you want to keep it that way, then you should either change the oil fairly frequently (if used on short trips, every 8000km is a good idea) or you may want to use fully-synthetic oil as you said. I believe the reason that fully-synthetic oil has become popular is because manufacturers use it to extend the servicing interval of new cars (the oil lasts longer between changes).
If it is not very clean, then I think it is a bit of a waste to use a really-expensive oil, as it will become dirty quite quickly and I think you would be better off to use a cheaper oil and change it more often.
Meanwhile my pick of fully-synthetic oil is the Castrol range because they have higher weights (thicker viscosity) than Mobil 1 or some of the others. There was a Castrol oil called 'Formula RS' which is superseded by 'Edge' and available in 10W60 - good if the engine is often really hot.
Otherwise the thinnest I reckon you should go is 5W30. The FIRE engine was not designed for (i.e. does not require) 0W30 oil, so I don't think you should use it (or any grade starting with '0W') - that means the oil can become very thin under certain conditions and this may endanger certain parts of the engine such as the camshaft and valvegear.
Other opinions may vary, so let's see what everyone else here says
Cheers,
-Alex