A motor is a tuning device just like anything else on the car. A faster motor can actually be much slower in lap times than a slower more controlled motor. Remember that races are not won in the straight but in the turns. It makes no difference how fast a motor spins but how much power gets to the ground and is still controllable. I've seen many times that the slower motor turns the faster laps.

There are several classes based on the motor. 17.5 is considered the "stock" class and anything faster is open class or mod. Since you have an Xray you will be in a Touring Class. You may find a 13.5 class too. It all depends on what your track runs.

For bashing out on the street or parking lot you can use anything you want since you don't have to stay within the lanes and make prescribed turns. Remember that the faster you go the worse the wreck will be.