I have a sIII with a 3.5 lump retro-fitted, with LPG.
I think you'd have to get it fitted professionally if you want to drive it on the road as insurance companies want the certificate that it's been done properly.
As for how they run, I have had no problems with mine, but I have never driven one without LPG so have nothing to compare it too, but I hear you do looses a smidge of performance. But I guess if you are just pottering about in it, it wouldn't matter, and if you wanted to do some kind of trials with it where you need every ounce of power, just switch back to petrol.
I think you need the multipoint kit if your defender is fuel injected. If you have carbs of some kind, just the single.