an intercooler can make a difference but like all things there as ups and downs to it all.
I am not very familiar with the JTDs but there a couple of things to consider before you go trying to whack on a massive intercooler.
first and foremost is the location of the intercooler. the theory behind intercoolers is that turbos run off exhaust gases, so get very hot. they also compress a gas and typically when something is subject to a higher pressure it generates heat. a hot gas becomes less dense. less dense air means you get less oxygen in the engine and so you have to put less fuel in to mix with it, or you end up running rich. intercoolers are designed to cool the charged gas, making it more dense and so you can get more fuel into the engine. more fuel means bigger bang means more power, put simply.
so it would make sense then that the intercooler needs to be in the coldest place you can get it! this is usually a front mounted in the bumper job, much like this subaru imprezza:
this means you get lots of cold air through the grill in the bumper, which is always good!
next thing is the breathing before the turbo. you want to make it as easy as possible for the turbo to get air to it. there is no point making the turbo work harder if it can get the air it needs to breath properly, it will just overheat destroy everything, probably eat all of the oil in the engine and leave you seized solid on the motorway.
typically this would involve a K&N style replacement high flow filter and some good straight pipe to a cold corner of the engine bay where a good flow of cold air is available, removing all the airboxes and resonator boxes along the way. this will produce more noise from the engine and you will hear the turbo spool through the filter, which can sound really nice, but on a 166 am not so sure....
next thing is now your gettin all this gas in you need to make sure you get it out again. this means exhaust. with a turbo system you want as little back pressure as possible, so things like back boxes and more importantly catylitic converts which cause big back pressure area no no, this makes the car very noisey though.
you also have to consider the effective range of the turbo and boost pressure in all this as well.
turbos have an efficient working range where they will flow good air, however once you exceed this range the turbo will maybe spin faster but the properties of the blades mean that it will not flow anymore air, but will get very hot and damage the turbo, so some sort of boost contoller would be useful.
as you can see its all fairly complex and with tuning like that is a once you've popped you cant stop sort of deal which will send you round and roundd upgrading different parts to cope with the added stresses you put on the engine. like clutches, gearboxes, diffs, drive shafts all become subject to greater stress with more power.
my advise would be to have the engines ECU remapped, which on diesels can produce good power gains without over doing it. my brother for example saw a dyno proven 30bhp gain on a 1.6 citroen diesel just for remapping.
it is possible to buy off the shelf diesel tuning boxes that may provide acceptable power gain, but these dont take into account your specific engine. every one is different, its seen different servicing, oil, fuel qualities etc all of which can affect the way the engine is working, so a proper rolling road remap that works off your current map would be most advisable.
it wasnt until i had my car run on a dyno that i found out the MAF was faulting running the engine lean!
probably also worth noting that a bigger intercooler would also generate more lag and more so if you had to extend the pipework to suit, as there is a bigger system to pressurise.
that and to prove a point a friend of mine who runs a company called RedDot down in london england fitting a front mounted intercooler to a GT 1.9jtdm along with one of his custom made air intakes (induction kit) and remapped it to 250bhp and a stupid amount of tourque. he showed me the graph to it. looked like fun!