There are a TON, literally a TON, of threads related to 318 build ups on this site. And the 400 hp 318 in the HRM build up has been discussed numerous times. Do a search and you'll see what I mean.
Can the engine in the article really make 400 hp? Probably on the right dyno. I think the numbers are a little generous, but not over the top crazy. I know I wouldn't want to run a used timing chain and mill the crap out of the heads to get the right compression on an engine I wanted some longevity out of.
Can a street 318 make 400 hp? Yes. Especially with the RHS heads available now. Even switching over to stock Magnum heads will net you much better flow than the stock 318 heads.
So, are you rebuilding 318? Trying to juice up a used one? Budget?
The biggest issue with the 318's is the lack of compression. Stock compression specs were bad enough, and the actual compression ratio's are often lower. If you're rebuilding, aftermarket pistons and zero-decking the block solve the compression issue. If you're not rebuilding, you'll have to get more creative.
But the article points out the basic formula-
Compression up around 9.5:1
Better flowing heads
cam
intake
carb
headers
Mopar Muscle did a similar build on a 318
here
And seriously, look in the small block section of the forum. Or search 318 build, magnum heads or magnum head conversion, 400hp 318, etc...