Hello out there.  I have a '65 200CID, 6 cyl, 3-spd.  I pulled the tranny out and have sheared teeth on the bottom "cluster" gear (or countershaft).  From my understanding, the low gear in this small 3-spd is not synchronized.  I have been told that in order to shift into low gear the car must not be rolling.  What are my options here?  Do I re-build the transmission I have and just "baby" the car, or is there an upgrade I can perform?  Is there another (better) transmission that will bolt up to the 6 cyl motor without a whole lot of modification?  

Sure Jones
Your 200 ci six can benefit from a t-5 swap just like the V8's. Not only does that give you all synchro tranny but it also gives you a better lower first gear and a taller high gear. So better gas mileage too. The same thing that refers to the V8's also is true of the sixes so take a look at the swap(its discussed on here hundreds of times) and decide if thats what you want to do.
The fact that it has a non synchro low is not a problem really. Most people dont shift until they are stopped anyway, so its not that big a deal. You can learn to double clutch if swapping the trans is over your head and you still feel you MUST hit low gear before stopping.  

I had an old Mustang guy tell me that small 3-spd (he calls it a "cracker box") was never any good.  I think I could probably re-build the transmission I have for less money than swapping in another transmission.  However, I am definitely open to improving the transmission, as I would like for my car to be a daily driver.  I believe my car has an 8-1/2" clutch.  Will the T-5 still just "bolt right in?"  

First off confirm that you have the six bolt pattern bellhousing, if not your out of it but I think you do. Then it depends on how you do it. Its recommended that you change over to the newer bellhousing but that means using a different flywheel and clutch. You can get an adapter to fit the T-5 to your present bellhousing and retain all the same clutch and flywheel and starter but you will still have to shorten your driveshaft by an inch or so. You will also have to use a new yoke. Also change the pilot bearing for the new T-5. It isnt exactly a bolt in but its not real difficult either, sounds worse then it is. Try http://www.mustangdepot.com/OnLineCatalog/Transmission/t5-conversion.htm
for parts. Or Modern Driveline, or Keisler engineering. They all carry the parts you need.  

I see now where there is some issue with using the later model bellhousing because the earlier 6 cyl blocks had the starter in a different place,,,but Modern driveline has kits for both the early and late 6 cyl and also 8.5/9  inch clutch.
http://www.moderndriveline.com/inline-6.htm  

They even have kits for the 5 bolt blocks,,,amazing.  

in 65 and 66 the little tranny and bellhouseing were used  in the 6cyl but in 67 they went to the big bell if you get a 67 bell clutch arm and Z-bar then you can bolt a small block 4 speed right in or with a little more mod you can go to a t-5 b shure to get the Z-bar and arm they are diff then the ones you have now