Is a $1000 wrecked truck with a 4.8 a good LS donor for a Challenge build?

It can be — a complete truck includes the engine's own harness and computer, and usually the transmission. Just know what you're buying:

• The 4.8 is the cheapest LS for a reason: Speedway says they can often be had for as little as $200 on their own, so $1,000 only makes sense if you'll use or sell the other parts.
• It's a real LS. The 4.8 shares the 5.3's block design (six-bolt mains, 3.780 in bore), cylinder heads, intake and PCM. The differences are inside: a shorter stroke (3.267 vs 3.622 in), different rods and a different cam. It makes 270–290 hp stock and can reach 400 hp on a stock bottom end with a cam and supporting parts.
• No AFM. 4.8s were never built with AFM, so there are no AFM lifters to worry about.
• Confirm the engine from the VIN (8th digit) before paying — see the donor finder.