I have the Clifford water heat intake, clifford shorty headers, Holley 390 carb, Clifford 264H cam on my 250 that also has 1.94" intake valves.
Ran it for a long time without hooking up the water heat and what I found was that even after the engine was warmed up, lots of low-speed stop&go driving or long waits at stoplights would cause the engine to load up and it would sputter or puff some black smoke once you got it going again. If I jetted it lean enough to keep this from happening, then it slowed down at the track (too lean).
After hooking up the water heat and installing a 195 degree thermostat, all such problems went away and I didn't lose any ET or MPH at the track either.
I routed the hoses similar to what Jack outlined. Got an older-style thermostat housing that had pipe fittings in both sides of it. Blocked off the one on the pass. side and ran the hose from the driver's side of the housing to the hole at the front of the intake. Then ran the hose from the rear of the intake into the heater core. The other hose from the heater core runs to the normal intake position on the engine. Heater works fine this way too and the hoses fit fine without cluttering up the engine compartment too badly.
Cheers!
-Will
