What PaulS says is exactly true! Absolutely No problem to make the change to the 351W in your 66. However, the
trans crossmember for the t5 will need to be fabed up or you can buy it from most any mustang supply house.
He's right about the headers, the cheap hooker # 6901 HKR are made for a 351W in a 64 - 73. Be prepared to have to beat them around a little. Anything other than a long tube header you might as well keep stock exhaust manifolds on the car. 351W stock exhaust manifolds are considered the poor mans header anyway.
Personally, I would do the hydraulic clutch set up as well (as you will have Z-bar issues) but i would get a better fitting header if money allows. Like the Hooker super competiton plus or like i have on my 351c Dougs Headers. Dougs headers have a heavy 3/8" flange and fit absolutly perfect. of course for as much as they cost, they better fit perfect.
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'66 Ragtop, vibrant red, 289-4V, 4-speed toploader
'68 Fastback, space blue metalic, 351C-4-V, 4-speed toploader