What events are you currently doing? What/which type of Rallying are you considering for the Rover?
We were doing the Classic Rallies here in Ireland, then slowly disappeared and morphed into Targa Rallies. Then the MSA band large and multi cylinder cars (more than 4cly) from the Targa Rallies.
As you suggest the car was not the best around the tight tests, but if given the chance to show it's speed it would move up the order. Often I get the comment that the Rover is not as cumbersome as people expect, but it's no Mk1 Escort. If you can get into a class full of Mercs you'd do well.
If the rallies are regularities, I think the Rover is better then Midgets, Minis, etc, due to the internal space and comfort.
If your doing autotest heavy events, the lack of available LSDs will frustrate you. I've got a Jag IRS grafted in the Rover, but if your doing Historic correct rallies, that will be a no, no. You can just as easly replace only the Rover Diff with a Jag power lock, but although period, maybe not allowed depending on the rally regulations.
As Sdibber says, the standard suspension is not suitable, even for a regularity event. Main thing is to reduce the roll and strengthen the rear end. We quickly bent the rear trailing arms, and broke the diff mount. Both easily fixed.
Overall, I think they make a great budget rally car, as the basics are there; standard brakes can be made good, good power, comfort and robust; just don't expect to win to much.
I love the V8, that's why I have the car, but I often wonder if the 2000 engine could be better, I understand you can tune them cheaper and maybe lighter (correct me if I wrong)