It isn't quite drop-in, but it's not too much harder than an 8-pin plug and play installation. The biggest complication is the need to solder LEDs to the decoder for lighting, including the need to observe the LED polarity.
Here's a DH165K0 mounted in the chassis of a Stewart F3. The F3 and other F unit models with Kato chassis date originally from 1987, so they are the same vintage as Atlas Kato locomotives, and mechanically and electrically they're very similar.
Although the Stewart F units were strides ahead of what had gone before -- especially the redoubtable Athearn F7 -- later units from Athearn Genesis, Walthers, and Broadway Limited have surpassed them in paint and detail. In particular, the Stewart locos came without grab irons or handrails, and they lacked other common details like lift rings. Modelers had to add separate details from sources like Detail Associates and Details West and supplement the paint with decals from Microscale. This turned out to be quite a task for each unit, and I'm grateful for the newer models that have saved all the extra work.Stewart also had a one size fits all headlight for units that had either a single headlight in the upper position or an upper light and a lower one in the loco nose door. The chassis casting wouldn't allow installation of a bulb or LED shining through the lower position alone. From the box, the A units had an incandescent bulb shining through a brass tube leading to the upper headlight housing.
In this unit, I replaced the incandescent bulb with a wired LED soldered to the auxiliary F0F pads at the center of the decoder. The LED was a little too big to fit inside the brass tube, but I found that if you simply let the LED sit in the circular opening for the tube in the A unit plastic coupler mount, it will stay there.
The upper and lower headlight lenses on the locos with dual lights are a single clear plastic molding, so that light from the upper location bleeds down into the light in the door. Without a great deal of extra work, this is as good as you're going to get, and while prices on eBay for these units vary widely, the small price differential between, say, a Stewart without a DCC interface and no handrails versus a comparable current-run DC-only Walthers Mainline loco, even with basic detail, makes the Walthers Mainline a better choice.On the other hand, I coilected a lot of these Stewart locos in the 1990s when they were the only thing available, and I think if you have them, they run very well, and they're worth the DCC upgrade.