I have a 2001 f350 7.3L and I installed the bully dog chip. I put it in tow/economy mode and my fuel mileage did go up by about three miles to a gallon, but that is in combination with the 4" exuast, and an afe cold air intake.
The bully dog chip does not like to run at low rpm, it will put out a ton of black smoke and your check engine light will come on. Well after six months of running with it, I have replaced the transmission, the fuel injector pump, the waste gate actuator and several of the sensors. The most important part that I threw out was the bully dog chip, never want to see it again. I could understand it if I had it in the highest setting and and drove my truck like crazy, but I never took it out of the economy mode. In my opinion this brand of programmer is not suited for the 7.3L engine and like others have suggested, go with Banks, they seem to have a much better product. I have a friend that has an Edge programmer in his and it seems to be doing fine.
Check out TS Performance in Bowling Green,KY, In my opinion they make the best chip out there for the 7.3 Powerstroke. Call there shop and talk to Dennis Perry, he is the owner and is super helpful. www.tsperformance.com