I'm using a 160 stat - have been since 1994 - even in the dead of winter here in OK, my normal running temperatures stabalize no lower than 171. Usually, they go a little higher in to the high 170's when the outside temp is below freezing. I can't complain. I've no issues with the heater or defroster.
As far as performance is concerned, the chip may or may not do much good. I used a HyperTech Thermomaster until recently but I never dyno'ed the car with it - so I can't really say if it made any 'real' difference. One thing it did do is control the fans sooner to work with the lower 160 stat and it bypassed the CAGS so that I didn't need to buy a bypass plug and I never saw the light again. That probably ain't worth the full retail price but it seemed like a good idea at the time.
My motor isn't an LT1 any more and I'm using a different chip now. I've got that Thermomaster chip sitting in a box in my garage. You interested in it? I'll make you a deal.