I need to replace the threaded headset on my Moto. The top (threaded) portion of the fork is also chewed beyond repair. I've seen where performance sells their house brand headset and fork for ~$100 as a pair. Can I use this set up? Does it need to be 1" and threaded, or can I go threadless?

You can go threaded or threadless. Bigger issue is maintaining fork length (crown seat to axle) and rake, modify one or both and things will be different, perhaps better probably not. Most new replacement forks will have less rake and be shorter, so the head tube angle will get steeper and the bike will handle differently, depending on the new trail.

For reference trail is the distance from the virtual intersection of the steering axis with the ground and the perpindicular line through the center of the axle. 50mm is pretty common, less more twitchy more more truck like.

if you go threadless, you'll need a new stem also.

So less fork rake at the same blade length gets you more trail, or greater stability, and greater tendency for toe overlap.

Less blade length at the same rake also gets you the same benefits. For most people I think more stability is a better change than a move toward twitchiness, or less stability.

Ken