Here's what I know:
The 8.1L production ended was only from 2001 to 2007. The 7.4 L engine was greatly improved in power output when it became the "Vortec" around '96 I think.
The 8.1 is an excellent engine. I have one in a dually. It is quiet, smooth, and powerful. It is almost as powerful as my '05 Duramax. It does, however use a lot of gas. I get about 10 mpg no matter what I'm doing with it.
You may consider looking for a "Duraburb". These come from a company (in Florida I think) that builds them. They take a 2500 suburban and install a Duramax/Allison drive train in it. Everything is done with factory parts and it looks factory when done. I've seen a few in person and they look like them came off the assembly line that way. It's not really as expensive as you might think.
