For what its worth I had and raced one when they were new back in 1982 (DR250Z that is).
The "S" wasn't just road registerable it was quite different. Way less suspension travel, puny little steel swing-arm, big lights, metallic paint options, gas miser CV carb, etc. IMHO the "S" was rubbish as a dirt bike, I never saw any local farmers or trail riders on an "S". The Z was cheap enough and so much better that they all bought those instead. The S was basically a commuter bike. I have seen registrable "Z"s in OZ too. With a proper PE style lighting kit and passenger pegs, but these are still a real Z (alloy swing-arm, longer legs etc). Its easy to tell the S and Z apart. The big headlight and pathetic little swing arm are the dead give aways to an S.
I even raced my basically standard new "Z" for a while in the club level Open Enduro class in NZ, until I admitted defeat and got a new KDX200 and changed classes!
Out of the crate they were just too gutless... :'( But that could be fixed!
The DR250Z was underpowered for that job, but at least it had decent handling. Once you got the engine breathing better it could keep up with XR250RE's (even pass them in the rough stuff) or beat a KLX250 without much fuss. But once the TT600K/L came out in 83' they became a bit of a joke in Open Enduro class. Mods of the day were hi-comp / big bore kits, (aftermarket - more CC and squeeze than the 300cc factory GN kit), a bigger pumper carb (can't remember what sort, standard was a VM28SS), White Bros headers and higher lift cam (I see Webb's cams are still available), UNI filter and alloy muffler etc.
I read an American Dirt Magazine on a DR250Z race project bike of the time (might have been Dirt Bike? I'm not sure its so long ago). From memory the dyno chart in the article showed them going from OEM of 17 bhp (rear wheel) to around 26 bhp. So not too bad for the day. Front forks weren't wonderful at higher speeds either, but then a front end swap from an RM-X/Z was an easy fix. We were luckier in NZ as the DR250Z there was basically the USA spec model, just fitted to what you might call in OZ "Rec Reg" specs, with the round PE speedo, a brake light switch (still kept the small taillight), and a hilarious squeezy horn for the RWC (guess it didn't need a battery!). I see some of them in OZ had some poxy passenger pegs mounted into that lovely alloy swing-arm - YUK! (guess you can TIG that up and linish it back nicely). ADR's etc...
These days its dead easy to buy a Suzuki GN based 300 cc upgrade kit with a matched / ready to go (jetted) new TK 34mm CV pumper carb off eBay (Chinese suppliers). (Although you'd get better response with a Mikuni TM33 pumper for around $240 USD off eBay, jetting per the KLX300 fitment should be a good starting point).
Add a warmer Webb cam and you're away! Probably 24-26 bhp at a guess. Likewise new heads are available ex China for around $300, which might solve the problem of buggered cam journals which is common. You can still buy the period Supertrapp alloy muffler kit and UNI filters too, so if you really want to, you can get a decent amount of power and all new barrel etc for under a grand. If you want to go all out, the Webb full race cam and comp valve springs, plus bigger valves might get you another hp or 2, but you'll lose some bottom engine and the smooth tick over. Beyond that the weak front brake and spindly 36mm forks were the bugbear for racing. The easy answer these days would be getting the front end off say an RM125/250 "E" etc (double leading shoes and superb 43mm forks). Their triple clamps bolt straight on to the DR250Z and transform the bike whilst still keeping it pre 84 class legal. (I found all the bits for an RM125E front end for around $500 US on eBay without difficulty, just now and had only missed another bloke selling the complete RM125E front end for $250 by a few weeks).
I really enjoyed my DR250Z. It was reliable, handled well and was easy to live with, plus lots of fun to ride.
I found myself doing stuff that I wouldn't have tried on some other bikes of the day, as it was so "friendly" to chuck about.
I've been slowly collecting some of the old bikes I had through my youth for the last few years, and a DR250Z would be welcome if I could find a reasonably complete one at the right price..
Might even be tempted to make a 300cc project bike out of her...