So I have had a bit of experience with the LS mods. I'll help you out as best I can.
Sound:
Deleting anything, will get you mad droning. The 3.9 in these cars is an exotic sounding motor, so it needs the right exhaust. In my experience, Magnaflow cat-back sounds amazing, tho a little quiet. I haven't heard Magnaflow cats, but I'd imagine they would sound good. Magnaflow has impressed me, I have personally called them and spoken with their technicians. They get it, they know how to make this motor sound a bit less euro and more American.
So to answer your question: Magnaflow cats is a better option than cat delete.
Performance:
Both the first gen and second gen have lackluster exhausts. On the first gen, your whole tail pipe is made up of 2" from the cat back. The LS wants 2-1/4 to 2-1/2 (depending on your Tune and mods). Just doing the exhaust on my (former) 2002 1st gen, I got more torque. Much more torque. I did Magnaflow cat back with X pipe 2-1/4".
For those with 2nd Gens:
After the cats you are 2-1/4", but after the resonators you are 2". Can confirm.
Tune:
I would recommend Torrie tunes
Unleashed Tuning - Horsepower is easy, traction is the real problem!
My Old Build:
So my first LS, 2002-V8, ran the Magnaflow Cat-Back 2-1/4" w/Xpipe, Rob (KBX) Eco/Track Tune files loaded with Xcal tuner, and a CAI/Nitrous ported built by SPSully.
KBX no longer exists. So Torrie is your go to tuner guy. A lot of members here swear by his tunes.
Cheers
