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For the trouble it would take to do that swap, you'd probably do better to just travel south and find a rust-free VX for your money.
As far as the G1 Insight-specific issues, you have to remember that they're all OLD! And they have a second motor/battery system that can cost a lot to fix. If you're going to buy a 10-15 year old car, you have to expect to put some money in it.
Just like any other 15 year old car, there are going to be issues with any surviving G1 Insight, no matter how well they are maintained and how low mileage they may be. In their defense I've owned two of them and so far, so good. But I chose them pretty carefully, and passed up a bunch of others in the process of finding one with as few issues as possible.
I agree with going manual, you'll never pull the same mpg out of a CVT that you'll get right out of the box in a stick. And every single CVT I test drove while searching for my first Insight had a shudder at take-off, ugh!
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