Stage 1 upgrades are all bolt on.... new pipes, air cleaner, new ignition and module, and maybe new plugs/wires. No need to open the engine.
Stage 2 upgrades involve going into the engine.... new cam, milling of the heads...etc.
Going to stage 2, you better already have stage 1 done first (getting rid of those stock pipes is the FIRST thing you should do!). But certainly you can go "straight" to a stage 2, it's just gonna be more expensive cuz you gotta do the same stuff done in the stage 1 upgrade, plus the engine internals for stage 2.
That's why they call it "stages". Instead of just dumping thousands in at once, you can do it over time and get increased horsepower gradually... sort of like getting a new bike more than once!
This "stage" stuff is explained in many places, but one of the best is:
Chopperdude, with an efi motor there is some duplication if you get a re-flash (about $100-150), since you will likely need to re-flashh again with the pistons and cams in stage 2. However, I am still glad that I did it in stages. It was more fun plus got to appreciate the diffeences.
gbenner... Good point on the extra cost of the reflash.
I guess that's part of the "formula" you have to weigh when deciding... dumping the money required to do stage 1 & stage 2 simultaneously (could be somewhere up around $1500-$2000?) and saving the reflash amount, or doing the two stages separately (as you have the cash) and paying for that portion twice.
But from what I'm hearing... I don't think I'd buy an EFI bike if I was gonna make many upgrades. For stock usage, and maybe stage 1, EFI's are totally awesome, but as you start making more combinations, I'm hearing way too many people having trouble with getting the reflash correct.
Simply because of that, I'm going carb with my '03 Deuce.