Who said the EJ205 is more reliable? They spin bearings and blow headgaskets (yes, I had one) as well as the next one.
I'd go look on NASIOC for more info as that EJ25 is essentially the same as the '06+ WRX EJ255 (slightly higher CR), which I would prefer. If that XT has the 4EAT you'll want the displacement as the Auto's suck the life out of the turbo'd engine. I had an '02 WRX AND an '04 FXT w/the 4EAT, and it was 7.5 seconds 0-60. People w/the 5-speed manual could do it <6 seconds.
RE: the non-avcs EJ20, You'll need to either use RomRaider/ECUflash or get a Cobb AP to tune out/around the AVCS...I'd check w/a tuner BEFORE you pull the trigger on that, as I'm NOT an expert. Also, a tune can help w/the crappy stock tune and performance w/the 4EAT.
I don't know your budget, but if you got the car cheap and want to keep it, I'd get a new shortblock for about $2K. Rebuild your heads and assuming YOU can do the labor, you'll have a fun car for cheap. I really don't trust any used Subaru turbo engine (except the old EJ22T), plus you never know how hard it was driven/maintained.
Ps. That stock TD04 is likely toast, too. Get another turbo (VF39/43/48 from an STI) as an upgrade. NASIOC has those, too.