I've had the H&R Sway Bars on my 00 996 C4 for about 2 years and really like them. They are set on the middle setting. The H&R are direct bolt on without any drop links. Another option is the GT3 sway bars. The difference is the GT3s are hollow and the H&Rs are solid. I've seen both and can recommend both.
As for wheels on the 996 Mk1, my recommendation is to stay with 18" wheels. Look around at the forums and I think you'll see similar comments. I have the factory turbo twist and aftermarket both in 18". The 18" tire profile just works best with the 996.1, IMO. I have Mic