what is considered street legal? is it horsepower?

street legal is what department of transportation doesnt decline. they dont APPROVE any product. any package that says DOT approved is bs. they just didnt decline it for street use.
ie- street tires are required to have a certain amout of tread pattern. DOT radials or street slicks have a minimum of a single groove.
you can have 1 billion hp, they could care less. as long as it meets their rules. in texas, not many people know this but, the body of the car cant be lower than the lowest part of the rims. so, all the people with coil overs and lowering kits that do this, are asking for a ticket.

well that keeps me away from houston. so there just "DOT" on the bottom of a, lets say turbo package, so u cant use it? sorta like a big R sign on the bottom of a movie?

yess, sort of. if its a turbo kit, look for a C.A.R.B. number. or ask if they have applied for one.