the RB26DETT (Race-Bred-2.6-litre-Duel over head cam-Electronic fuel injection-Twin Turbo) is definitely worth considering, they are race bred engines so are made with power in mind. found in the skyline gtr's (r32, r33 and r34) it runs 4WD standard and puts out around 330bhp, although official figures will tell you about 280bhp. in terms of wanting power there really isn't a much better engine you can go for, the tuning capabilities are as limited as your budget, they can be modded to well over 1000bhp, ive seen a 700bhp r32 gtr race a 550bhp ford sierra cosworth down a strait mile and the skyline left it for dead.
it will keep the traction with the 4WD gearbox,possibly would have traction issues with a RWD box, simply due to high power and torque, but then 4WD setup would be difficult to transfer to a RWD, or FWD car, but it has been done, a s13 180sx i saw down the london miss banzai tunnel run (onother run THIS sat if people up for it!!) was running a RB26DETT, so it can be done. you can go for the RB25DET engine which is RWD, save some work, out of the skyline gts-t. not sure what car you have but anything can be made to go in anything with enough money and know how, and heres the proof, check out this corvette 7.0 v8 ls1 powered ek civic hatch!
http://www.youtube.com/watch?v=DudjNvnsfKE
in terms of handling well, that depends on the chassis and set up of the host car, not too much to do with engine, maybe exept Weight distribution changes...you need a sport oriantated chassis for the best handling, such as the civic ek9 type-r which comes out of the factory with a seam welded chassis. reliability should be high as its a nissan engine. so if you do it right it will definaltely be worth doing, not much in terms of cars on the road would give too much trouble.
a few vids to give you some ideas of the possible power,
1000bhp r33 vs hayabusa motorbike, (considered fastest bike on planet!)
http://www.youtube.com/watch?v=oBbzUNbPwyc
http://www.youtube.com/watch?v=k90jYI4eBLs
mine's r34 at tsukuba raceway
http://www.youtube.com/watch?v=y9YEFEkAvJk