If you narrow the suspension arms you'll probably want to replace them with tubular. If the tie rods are shortened the same amount and all other pivot points, rack height etc remain the same you should be good. The only problem with shortening the arms and leaving inner pivot points will be more limited suspension travel and maybe an increase in camber change. If you move inner mounting locations you'll need a shorter rack to keep tie rod inner joints lined up with upper and lower pivot points. Do some reading here
http://www.mustangandfords.com/techa.../photo_05.html
Take all your measurements and draw them out in CAD or on squared paper. You'll see how it all works before cutting into anything.