I have a rebuilt 402, 2 bolt in my 66 chevelle, currently .060 over. It has stock "290" closed chamber oval port heads (2.06 intake/1.72 exhaust) and stock intake at the moment. Bottom end is stock as well. I'm not looking to put this on the track but would like to kick up the performance for some fun street driving. The engine is mated to a Muncie M20 and Posi rearend 3.31 ratio.

I'm thinking about a Performer Air Gap intake with a Holley Street Avenger 770CFM. I'll go with Hooker Competition headers and 2 1/2" flowmaster exhaust system. Is this a good combo?

Good choice on the intake/carb,headers and exhaust
If you want to save a few bucks,and not really lose any performace, a regular RPM intake with blocked off exhaust crossovers and a 3310 750 Holley will do just as good.

The Air Gap is a good choice. Of course a cam, the type would depend on your budget and what you want out of it. I would step up to 2.19 intake and 1.88 exhaust valves along with a little port work, it would make a world of difference.

Stuff in one of Harolds voodoo 268 camshafts and it ought to be good to go with the 3.31 gears as long as the compression isnt wicked high. Id want somewhere between 9.5:1-10:1 compression for that cam to be safe and perform well.

The smaller valves wont be a giant hinderance being that you wont need to rev the garbage out of the engine to make descent power. Plus, you already made it sound as if you arent looking for extreme performance either, just a good running car. So, the stock valve sizes will do well enough for you, but larger ones would run better if you decided to go that route. But I wouldnt call it necessary.

rpm intake and 750 vacuum sec carb and small tube headers and the 2 1/2 exhaust is a great add on to the 402 engine. get some good flowing mufflers too i like the full boar series, 40 bucks a peice, they sell a set that is for "375 hp engines" they are fully welded mufflers and really sound great.

you will find if you spend some time really dialing in your timing curve and carb, you will fine some big gains with the engine.

tuning tuning tuning, do the little things that help out horsepower too, stock style clutch fans, coated headers,synthetic oils, K&N air filter, some kinda cold air induction set up, think about all the small things that add up to big horsepower, just super tunning a combo you can find 50 plus horsepower sitting in your engine just waiting to be found.

and if you really want some free hp , port your own heads, of course you will have to buy grinding stones, but just a general removal of all casting flash, and smoothing the short turn radi, this here alone made my 402 go from 13.9 to 13.6 and i gained darn near 5 mph thru the traps. and this was on a set of 290 heads small valves and the valves was sunken bad, all i did was take the heads off, grind done all the casting, put the heads back to gether and went back to the track, it only cost me my time and a few grinding stone and a set of 22 dollar head gaskets, i reused everything else, even the intake gaskets.

just thought i would try and pass along some ideas

You may not want to hear this, but I have installed an Air Gap and using a "670" Avenger. With the open plenum design, a 670 is more than enough. My motor has throttle response like a fuel injected motor now and I still have to rejet and tune with some accumulation of road miles. I even had to go to the black (heavy) secondary spring to slow down the secondaries they were coming in so hard that I had a secondary bog. For comparison, I had tried this same motor setup with a divided plenum dual plane and both 770 & 870 carbs. The 770 worked ok but was lazy on the bottum, the 870 was way too big - the fuel just kind of squirted out in a stream but didn't really atomoize. The 670 has great fuel atomization due to the velocity of air through the carb and the car has real hard off idle throttle response. With the smaller carb, the motor also idles down to 750 now. The whole thing is just more efficient.

FYI, this is set up on a 408 CI motor, 290 heads w/ 2.19/1.72 valves and a hyd roller cam 230/242.