These are the 17 cars that get the racing modification:
Acura NSX '91
Chevrolet Camaro SS '10
Chevrolet Camaro Z28 '69
Chevrolet Corvette Z06 (C6) '06
Chevrolet Corvette ZR1 (C6) '09
Dodge Challenger R/T '70
Honda CIVIC TYPE R (EK) '97
Honda INTEGRA TYPE R (DC5) '04
Lexus IS F '07
Lotus Elise '96
Lotus Elise 111R '04
Mitsubishi Lancer Evolution IX GSR '05
Nissan SILVIA spec-R AERO (S15) '02
Subaru IMPREZA Sedan WRX STI spec C Type RA '05
Suzuki Cappuccino (EA21R) '95
TVR Tuscan Speed 6 '00
Volkswagen Golf IV GTI '01
and yes it does change their appearance. Aero parts are fitted, various decals are added, some performance/tuning parts are added and the base colour of the car becomes white (you can paint the car a different colour still).