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You can put an underdrive on a stock car and gain some HP. It is not gonna hurt anything. You are also not gonna feel any change in HP, its only gonna free up 1-2HP.
Depends on what style you get. If you go with the "street" version that allows you to keep power steering and a/c, you'll see a good 5 HP. If you get the "race" version that runs the alternator only, 10 HP is pretty standard. The UDP isn't as dependant on other mods to see gains since it's a straight reduction in rotational mass. Same as going to lighter wheels.