The 160 carb is a little lean in the midrange but if the low end is properly adjusted there are no problems, unless you are going to mount the tank on the CG, then you only need a Cline regulator.

I own two of these engines, they both run flawlessly with the Jtec dual snuffler and Bisson BGX mufflers along with the stock muffler. I added a Jett incowl muffler and had nothing but problems. The 160 fx ran great on the ground with the Jett but in the air it would roast plugs and dead stick or would be too rich and have to land. Don't do it. If yours is NIB, send it back and I'll sell you mine for 1/2 price and you can try it. Mine still looks new. I could never get the 160fx/Jett muffler to run for a full flight and from what I have read noone else could either.

If you want to go forward with the carb mod, leave the muffler out of the equation. First run the stock engine on a test stand to break-in doing like they say in the manual. Then do 3 to 5 minute heat cycles bringing the engine up to peak and back off a couple hundred rpm allowing the engine to cool completely between runs. After about 1/2 hour total run time the engine will be seasoned and good to go for many many hours. I broke mine in with a APC 17X8 prop on 5% nitro and later ran the engine on from 5% to 15%. It runs well on all of them but I use 10% in almost everything so that is what it gets. The engine is very happy with a APC 18X6 after break-in and even a Mejzlik 20X6 after a few gallons.