Howdy Bdj66:
The 250 can be swapped into a '68 Mustang. It is not a direct bolt in, even though the 200 and 250 are of the same engine family. The 250 has about a 2" taller block and is wider at the bottom. The 250 has a V8 bell housing so your 200 C4 will not fit. The 250 may be a litle longer due to a longer water pump snout and dual pulleys. You will need to use radiator hoses from a '69 - '71 Mustang 250 to get the larger 1.5" at the water pump and thermo housing and adapters to connect to the 1.25 radiator bungs.
If you can get everthing from the donor from the driveshaft, trans mount, engine mounts to the air cleaner.
Since the '68 Mustang has a more spacious engine bay, this upgrade should be easier than if it were a '66.
Adios, David