Dave,
Cheap shocks from Autozone will be better then the OE shocks. Ford was trying to make everyone happy by making it ride like a car, because everyone knows Trucks/SUV's are supposed to ride smooth.
Currently, I am running Monroe Reflex Shocks. Prior to that I had Edelbrock Performer IAS shocks. I sent them beck to get replaced because they wore ut and the bushings went to hell.
My Reflex are already going to hell because of the CRAP Ohio roads. They still do fine, but they are starting to feel different.
The next ones I get will either be KYB Monomax or Billstein.
As for a V8, Ford quit producing the 302 (5.0L) at the end of the 2001 Model year of the Explorers. That was the only V8 that should fit in the Trac we have. The 2002 to present Explorers are built on a new chassis where the Trac is based off the 1996 to 2001 Explorer.
Really, the Trac MPG isn't any worse then the competition. The others out there that are the same size, etc. get the same MPG. Honestly, I think 20 to 23 MPG is the limit of trucks the size of a Trac. The others out there, no matter the size engine, HP ratings, etc. do the same. It is just the way it is.
Tom