As far as I know there aren't any shift kits like a B&M shift kit that you'd buy off the shelf for a 700. So I wouldn't call it a shift kit. It would be changes to accumulator springs an other things. What can be done is there would be no lag time between shifts, usually this only happens at WOT or close to it. Otherwise it shifts normal, that's what mine does.
You can have non lockup converters or lockup converters, for street use a lockup converter is best. I've wired in a toggle switch to be able to turn the lockup on & off.
I would say no the governor is not replaced or maybe the plastic gear on it might be replaced.
What are the benefits of a performance shift kit? Firmer shifts at the cost of transmission longevity. Shift kits are basically only for shortening the time between ranges (gears) for potentially faster elapsed times at the track, or to give the owner of the car the joy of throwing his head back & hearing the tires chirp when it shifts. All of this is to say that everything you do to make the trans shift quicker is subtracting from the life of the transmission. Stock transmissions will almost always go 200K miles or more.. Transmissions with banging shifts.. not so much.
No, rebuilders do not typically replace governors during a rebuild... The last 700 was built over 23 years ago, and the first one was built over 33 years ago. I doubt there is a supply of new governors to be found anywhere. Unless a governor is damaged at the lands where it contacts the case, or the internal valve or bore is worn to the point where it is leaking pressure, there really is no need/reason to replace them. The drive gear should be replaced at time of rebuild.
Lock-up depends on what type of converter you are running. There are many positive reasons to run a lock-up converter. About the only place you would not need lock-up converter would be on a track only car.. Then who in their right mind would be running a 700 in a track only car?
TransGo offers the best shift kit for the 700R4. There are pressure switches in the valve body that lock up the converter in all but first gear I think.. My 700R4 was rebuild and most important upgraded with a 2-3 TransGo shift kit. My 700R4 is sent up to lock up in fouth gear only (overdrive). The 700R4 should always be rebuild and upgraded with a 2-3 shift kit, corvette servo, ten vane pump and all of the factory upgrades that the newer 700R4`s offer that the older one didnt.
the 1-2 shift is firmer because of the split in the gear ratio far as the governer there was many different ones for different vehicle applacation most far as a shift kit like already stated it increases pressure and firms up shifts as a transmission rebuilder i use the trans go shift kit it is more complex but it fixes known issues with the trans the B and M and fair banks kits are simple but if i use them i do not put spacers in the 1- 2 accumlator piston