Overdrive is the best way to go, in my opinion. May be a little more work than swapping the ring and pinion, but once the work is done there are nothing but advantages. You get 4 gears and keep a good pulling rear end, when you need it. With the TH350 and a 3.08 gear your take off acceleration will not be as good as the 700R4/stock low rear end. And you won't have as much gearing to accelerate or pass in second gear versus third in the overdrive.
-ftyler
