Uh, good luck modding it to only run on 4 cylinders. You could probably disconnect 4 spark plug wires to simulate the effect with your current truck though.
(just kidding!)
My guess is you won't see any real difference in fuel economy. This is purely based on reading posts of other last generation Av owners who've made the switch. Likewise you probably won't notice the power difference, despite the increase for the 07. The extra power only really offsets the increase weight, while the cylinder deactivation only offsets the increased power and weight to keep fuel economy roughly the same.
Having come from an 04 Silverado I can't claim that the following observations are exactly what you'd see going from your older model Av, but:
2004 Silverado:
weight - roughly 5200 pounds (ECSB Z-71 4x4)
engine / gearing - 5.3l (295 horse) / 3.73
best fuel economy (1 tank average): 21.7 mpg
normal daily driver range for fuel economy (home-work-back, 30 mil. mostly interstate) - 18.0 - 19.7 mpg
2007 Avalanche:
weight - roughly 5700 pounds (LTZ 4x4)
engine / gearing - 5.3l (310 horse) / 4.10
best fuel economy - 21.4
normal daily driver range for fuel economy - 17.5 - 20.5 (past 2 months have averaged right at or just above 20, 15k miles now, so maybe "breaking in"?)
Not a whole lot of difference, despite more power, lower gearing, more weight, and AFM. My driving style, local traffic, weather conditions, all seem to have as much or more impact than the change from one vehicle to the other has had for me.
So unless you're really interested in the other changes (won't say improvements to someone that might consider what's on their own Av to be as good or better than the new features / design), I'd say save the payment / insurance money and put it on gas with your current Av.
