To actually speak to your question, since you live in "flatland" and don't tow much, I think you'll be fine with the 6.0L unless you want to go racing.

The 8.1 makes good power, but it also uses a more fuel, and is noted to have piston slap that annoys a lot of people. It's also known to use oil. Sometimes a LOT of oil. (Neither issue ever seems to lead to any failures though.)
I wouldn't be afraid of any of the years from '99-06. For that matter, a '96-99 version would be a good find too if it was in nice shape, though it'd be a 350 or a 6.5L diesel. The diesel isn't a bad engine if it's been treated well.
On the 99+ trucks, if the cluster has issues, it's a very cheap fix to get it updated via several services on ebay.
If you plan to keep it forever, try to find a more base truck. I HIGHLY recommend the manual HVAC if you can find it. The auto HVAC controls on the older trucks can get a little picky, and you can't just put the manual controller in... If you get really lucky, you'll find one that doesn't have the huge center console, and has floor shift 4x4, but I don't think they made many that way.
C