I have milled j-heads on my 318. it runs pretty well. I did keep the ports stock, i should have just polished them up a little bit. But yes, without much mods the 318 can't move as much air as the 360 ports deliver at low speeds. Volume vs Velocity, however high end its pretty decent. I'd like to try some edelbrock magnum heads on my car before i run them on my 360, just to see.
I do have 3500stall, and 3.91 r&p to help with any 'lack in low end' :D