Having said that, there's still a fair amount of work to be done...

Engine

Dead easy. Remove the engine according to the instructions in the workshop manual. Take it along to your favourite two stroke tuner. Give him a large wad of cash, and tell him you want a stage III race tune.
That's just the start...
Pistons - Last pretty well on the whole, but I'll replace mine at the start of each season, and again at the mid point just to be sure.
Head gasket - Can be sealed with a thin coat of Yamaha bond, but this is not strictly necessary, more of a safeguard.
Plugs - Run 10s as opposed to the standard 9s. NGK B10EGV work fine for me.
Coolant - Plain water is all that's allowed, and all it needs. Drain and replace at the end of each meeting.
Gearbox oil - A good light gear oil. At the moment, I'm using Silkolene, but I'm sure that most oil manufacturers will have a suitable offering.
Kickstart - Some remove it. I've left it on, purely as I find it easier to kick start a bike than run like an idiot up and down the paddock trying to start a flooded engine.
Exhausts - Are standard. However, the TZR isn't known for ground clearance, so most riders end up welding plates over the holes that get worn in them.

Carbs

Mains - Standard TZRs run 230 mains. I'll generally run 220s or 230s depending on the weather. I have a dyno curve showing what happens with 200s - Quicker throttle response, 2bhp top end improvement, 6bhp improvement at 8000. Sadly I also have a melted piston to prove what happens if you try and use this.
Pilots - I've gone up a size on pilots. However, they can get bunged up with premix very quickly. Check them often, and check them well. Symptoms include an inability to run at part throttle and a chronic lag when opening the throttle wide.
Needles - Stock needles are fine, but raise them one notch. I do have a set of FIII kit needles but don't use them.
Airbox - Leave standard.
Filter - Use an air filter, but run it dry. Clean it often.

Lubrication system

Disconnect the Yamaha autolube system, as you'll be running on premix. Some racers remove the autolube pump altogether, but if you do this you'll need to make up a blanking plate to cover the hole left in the crankcase.
Once this is done, you can remove all oil delivery pipes, remembering to blank off the ensuing holes left in the carb rubbers. Remove the oil reservoir from the rear sub frame, along with the oil level sensor.
The oil you choose to pre-mix is up to you, but it must be a top quality 100% synthetic two-stroke oil. Up 'til now I've been using Motul 800 2T in mine, with no ill effects. Others use Castrol 747 which is a top dollar racing oil, but has an added advantage of smelling good. Pre-mix according to the recommendations of the oil manufacturer. I've been running Motul at 25:1.

Chassis

There's very little room for any changes here. Firstly because there is very little wrong with the chassis, and secondly because the regs don't allow you to change much.
Add a steering damper for starters. You may think the TZR is pretty stable (and 99% of the time it is) but when you're flapping out of control towards the tyres at Woodcote, you'll be glad for it.
Footpegs - The ACU state they must be solid, so get them filled with weld, or if you're flash, get a solid pair fabricated. The standard ones are far too long, so cut them in half.
Rear brake lever - Cut this in half too, as it will get in the way on right hand bends.
Remount the CDI unit under the seat unit. This is to save it in the event of a crash.
Lose the sidestand.
Remove pillion pegs.

Bodywork

Remove mirrors. (If you do this, can I have 'em? My road going TZR doesn't have any at the moment. Ta).
Fill the large aperture for the headlight with a sheet of glass fibre matting.
You can, if you want, go the whole way and fit lightweight race bodywork. Darren Thomas (on my links page) can do this kind of stuff for you. I've left the standard bodywork in place though, apart from the seat unit which is replaced by a single seater. If you're going to do this, you'll need to make up a small bracket to bolt it to. TZ250 seat units are pretty popular.
Whatever you do, resist the temptation to spend many hours and/or lots of cash on a posh paint job. It won't last long, but may give the marshals something to talk about when they pull the bike out of the gravel.

Electrics

Basically, you'll want to remove everything that isn't concerned with generating sparks, powering the tacho, or operating the power valves. Running a total loss system kills batteries. You'll need to recharge before each meeting (before each race if possible) and replace the battery for each new season.
Obviously, all lights and indicators get removed.
You can, should you wish, remove the ignition switch and replace it with a simpler toggle switch. I didn't bother. I still start my race bike with a key and a prod on the kickstarter.

Instruments

Remove the speedo, and idiot lights. Cut the instrument panel in half, leaving behind just the tacho and temp gauge. Some riders like to build a new panel from aluminium sheet, and mount the tacho so that the needle points straight up at 10,000rpm. I didn't bother.

Controls

Remove everything except the throttle, brake, clutch and kill switch. You can, if you wish, remove the choke assembly, but that makes for much harder starting. Mine still has it. As it weighs about 12 grams I'm not too bothered by this.

Wheels/Tyres

Use Avon AM22/23 club compound. The rear is oversized (130).

Brakes

Throw away the standard hoses and use braided steel ones. As far as pads go, it's up to you. I'm happy with Ferodo race compound, but I've heard good things about many others.

Suspension

There's very little scope for modification here. Run the rear pre-load as high as you can get away with to increase ground clearance. I run 12.5wt fork oil, which seems about right for me. This really is a matter of personal preference. Front pre-load varies so much from track to track that there's very little reason to mention it here.
The forks should be dropped down the yokes to try and quicken the steering, but not too much as ground clearance is marginal anyway. Some riders like to run the bars under the yokes, I prefer to keep mine on top.

Gearing

Depends on the track. 14/40 for a fast track like Snetterton, down to 14/43 for twiddly little ones like Lydden. Renthal do a nice range of lightweight alloy sprockets, but for some reason they don't list the TZR250 as a recognised fitment.

I'm sure I've probably forgotten something in this lot. Essential things to have while attempting race preprartion are a workshop manual, good quality torque wrenches, lots of tea and an understanding partner.

Finally, it has to be said that I carried out absolutely none of the above. The original prep of my TZR was performed by Ian Basset, to whom I owe a debt of thanks and possibly several large beers.

And even more finally, it has to be said that if you try any of the above and hurt yourself, it's absolutely, positively, 100% not my fault. OK?