At that level of hp you would be fine as is I would say with the 8.25. I've seen posts and read one of the mags somewhere where they say the rear is good for something like 400 to 450 hp and if I remember right they said something about being fine for drag use if slicks not used otherwise upgrades would need to be done. I'll have to dig around to find the article.
I did find a Feb 04 article in Mopar Action that talks about upgrading the rear. They also say that the 8.25 is fine for small blocks and is also fine for standard 383/400 applications. They took the rear to Randy's Ring and Pinon Service. Premise of the article was to put together a stronger 8.25 with sure grip in an hour. Said the 8.25 beefed up in '97 with bigger axle splines and axle diameter and bigger C clips.
Due to C clip design Randy's recommended (at least in the article) to go with an Auburn sure grip. Of course, if an all out racer a Detroit Locker was suggested, but not for the street.
Mentions the axles being in Jeep Cherokees to Dakotas and can be used in earlier cars, but might have to be shortened to fit narrower rears (ie different lengths from the vehicle you took them from) and then resplined. Or you can just buy new ones from Strange or Moser.
Says the only tools you need, apart from general sockets and wrenches etc., are a torque wrench, a universal dial indicator and a specialty giant allen wrench available from Randy's (supposed to be inexpensive, but that can be relative). Says that entire proceedure can be done in an hour to 90 minutes as long as you aren't changing gear ratios.
Looking through the pictures the only real things of note they mention is (and if you are not putting in an auburn then probably not applicable here) that the ring gear bolts are left hand thread! They remove the ring gear and then after cleaning they pop it in the oven for 30 min at 250 so it can be easily slipped on. They also had an issue with the Auburn hitting the case inside. They simply ground the new diff case down radiusing the sharp edge. Took about 5 minutes.
Tool wise they did not mention in the article, but did in the pictures that you need to do the backlash and bearing preload proceedure. For this they say you need to borrow the Miller adjusting tool from the dealer (like they are going to loan it out right!) or buy one of Randy's versions.
A good tip they gave for saving the seals on the axle ends was to slip the axle out part way, then put a few sheets of rolled paper around the axle and slide it down until it sticks in past the seal, let it unroll a bit to contact the seal and then while holding it in place you can slip the axle out without cutting the seal with the axle splines. Then install your new larger axle in with the paper there and when past the paper with the splines, just pull the paper out.
That about cover sit apart from standard axle removal etc. (take brakes off, pull pin in diff, push axles in a bit, remove C clips and pull axles out etc. Might have missed a step, but should be in standard service manual for axle removal).
Interestingly they show a picture of the standard 8.25, the larger 8.25 axle (said called an 8 3/8 in trucks sometimes) and the 8.75 axle splined ends. The later 8.25 is only very slightly smaller than the 8.75 one.
Hope that helps someone out there.