Pretty simple, really. We all are familiar with the exhaust size/horse power chart. Use it.
I run 2 1/2 from my headers all the way out the back, and I think it performs very well.
With that said, I originally had 2 1/2 going back to the muffs with turn downs in front of the diff. Since i ran it all the way out the back, the performance difference is very noticeable, for the better..