What is the main purpose of the purge canister? Do I really need it? I have a stock 350 TPI with smog delete and EGR removed.

you mean the charcoal canister? It allows the gas tank to vent its fumes and store those fumes until the engine is a part throttle cruise and burns the vapors off. Instead of just venting the tank to the air.

It wont hurt you to remove it, but it wont hurt to leave it in....

The little round valve on top of the EVAP canister also provides a method to control fuel tank vapor pressure at 1 PSIG. If you remove the system and plug the lines, tank pressure will be controlled only by the cap, and can achieve a lot higher pressure than the tank should handle. If you allow the tank vapors to simply vent, you can lose 5-7% of the tank's liquid volume within a week to simple evaporation. Pour a cup of gasoline into a coffee can and set it outside. Check it in a week (or less) and see how much is left. That's fuel and money wasted, regardless of whether or not it pollutes the air. And since the system doesn't require any engine power to operate, it doesn't create a power penalty to keep it. If you need the space for something else, like turbo intercoolaer plumbing or a cold air intake, consider installing a later model EVAP canister under the car. That's where you'll find them on most newer vehicles.

If the original canister started going bad, would it be possible to find black soot underneath?

What kind of newer vehicle should I try to get a newer canister off of or does it matter.