-You can drive it w/o o2 but take it easy and try to not build to much boost, i drove my DSM about 12 miles
-3" is needed for optimal power, past about 280-300WHP 3" is highly recommended
-Get 850cc, you will want to upgrade the turbo again later as most boost heads and that way you wont have to upgrade the fuel system again. You can always lean it out as much as you need with a good fuel management system
-If you are really reaching full boost by 2900rpm's then N20 is not needed, but I don't understand how its building that fast with a 57 trim unless by full boost you mean something like .5 bar? Supras with 57 trims don't build full boost till about 3100-3400RPMs and they have an extra 600cc's on your engine along with two extra pistons. But if your looking at making big numbers on the streets look into alcohol injection, that's what I was running on my old GN and was pulling of better numbers that most people on race gas with the same turbo's.