The head looks pretty rough with big gaps between the valve seat and port wall.
We last left project SR20 headless as we finished up the bottom end. If the bottom end can be considered the legs of an engine, the head is the heart and lungs. Building a good bottom end is the foundation of a hard-running motor. Power, however, is made in the head and races are won by how well the head works. While the cylinder head is the most expensive part of any engine build, we're still looking toward keeping our low budget approach, using methods that have DIY potential.
The cylinder head holds the keys to power by the fact that its ports are the choke points to airflow into and exhaust out of the cylinders. The more balanced and proportional flow an engine can get, the more power it can make. Some may argue that this isn't true but it is. Ports that are too large hurt power for many reasons but flow never will. Modifying heads by porting them is very labor intensive, costly, and if you do things improperly, there's a good chance you can actually hurt flow instead of gain flow.
A carbide-tipped die grinder bit is used for most of the work. These are fairly inexpensive at most industrial supply houses.
Fortunately, a large percentage of the flow gains that porting has to offer can be done by a semi-skilled enthusiast at home with some simple tools. What you need is a compressor, an air die grinder, an assortment of carbide cutter tools, a sanding roll mandrel, and a fistful of 220-grit cartridge rolls. These goodies can be purchased cheaply from your local industrial supply house or even mail order performance houses like Summit Racing.
The tricks toward modding your head can be done on any motor, not just the SR20. Usually on most heads, about 50 percent of the flow gains a skilled technician can find are in the area of the valve seat and the valve job itself. There are a lot of gains here because the velocities of the intake and exhaust gasses are highest at this point in the port, especially at partial valve lifts. Although porting is very difficult and requires a lot of skill and experience, most people can get a lot of these gains with simple porting without getting in trouble here.
Howard Watanabe of Technosquare first starts by smoothing out the sharp edge on the inside radius of the intake port. This minor tweak really helps flow. A lame mechanic, like yours truly, could do this sort of simple porting, but hey, someone had to take the pictures!
Before starting on modding your head it's best to make sure the head is in good condition. If your engine overheats, it's best to check the head very carefully. If it's warped beyond the factory service limit, the head should be discarded no matter what the machine shop says. SR20 engines don't like being overheated and if they've overheated to the point of warpage, they'll quickly warp again in normal use even if it's corrected by milling the deck surface. They may also tend to seize cam journals and drop valve seats. There's only one place to put a severely overheated SR-in the trash.
The first step to get more flow is to look at the junction between the steel valve seat and the aluminum head. There are always gaps between the machined valve seat and the cast cylinder head. With your die grinder, you want to eliminate or at least greatly reduce these gaps, making a smooth transition between the seat and the head. If you've never done this, it's best to practice on someone's junk head or at least turn the air pressure to your die grinder down to slow it so you don't go too far. Blend the valve seat to the port removing as little material as possible. Extend your blending about a half-inch below the valve seat and be careful not to nick the 45-degree seating surface of the valve. It's really important not to nick the valve seat because you don't want to make the seating surface for the valve very deep when the valve job is done. This reduces flow by shrouding the valve's seating surface. You shouldn't have to remove much more than 0.06 inch of material.
Next, the intake valve seat is blended into the port wall. Howard removes the least amount of material as possible. | 
The result is a smooth transition from the valve seat to the port wall. | 
The process is repeated on the short side radius of the exhaust port. |
Blending of the exhaust seat. | 
The end result looks almost stock but will flow much better. | 
Another view of the blended intake and exhaust ports. |