Originally Posted by downwardspiral

Bring a bucket/bottle of water and dump it on the windshield, then check under the glove box to see if the water is gettting through. The lower cowl panels tend to rot on the older mustangs, and fixing it (which I'm doing on my car) is a pretty big job. It really depends on what you are looking for in order to determine what to look for. I'd lean more towards the 69, just because its my favorite year, and had more potent engine choices (70 is the best for engines though).
For performance applications, I'd look for a 351C 2V- usually you can tell just by checking the valve covers, but you may have to count the valve cover bolts, also there will be a 2 or a 4 on the corner of the head. The 2v heads are more streetable, with better low end charicteristics. A 351W is also a good option for performance, as the aftermarket is much stronger than that of the cleveland, but the C has legendary heads also used on the boss 302 and Nascar. And a 9" rear is nice to have, and can be identified by the removable carrier and extruded rear face (8"'s also have removable carriers, but have a round rear face). Other than that, check for a straight body, rust under the car and all the other standard pre-purchase checks... And I'd ask as many questions about what has been done to the car as you can to really get a feel for what kind of mechanic the previous owner is.
-happy hunting