I hope Alex or one of the real experts weighs in on this topic but you can learn a lot from the JLC Challenger thread already posted.
FWIW I'll say what I have found about Fatboy conversions.
I have put these speakers, which I got from Lionel, in two recent 3rd Rail engines and an Aura brand speaker in a 3rd Rail Jawn Henry. In each case I had been disappointed in the sound quality of the engine. In the Jawn Henry the problem was with the forward speaker that produces the turbine sounds.
One engine is a GS4 and I did almost the same modification as Laidoffsick describes above after seeing his earlier posting on another thread. The difference in my case was that I used an aerosol spray can top for the speaker enclosure rather than the Lionel part that goes with this particular speaker, which would have required a lot of grinding down to fit in the GS4's tender. The high improvement in sound quality was exactly as Laidoffsick describes. I am sure that the difference was as much down to putting the speaker in an enclosure as it was to replacing the stock speaker, which did not have one, with a Fatboy.
Before that, I put a Fatboy speaker in a recent issue 3rd rail E7 diesel, which had exactly the same stock speaker as the GS4.There was no room in this model for a speaker enclosure over the original or the new speaker. Maybe more important, unlike my recent Lionel diesels a new speaker could not be mounted in the fuel tank, where Lionel use two baby Fatboys in a large clear plastic enclosure, because of the location of the 3rd Rail horizontal drive system. There was a sound improvement but it was relatively slight.
In the Jawn Henry I tested a whole load of different speakers, including a Fatboy. I found no real improvement over the original until I tried an Aura full range speaker rated at the same Ohms as the stock speaker but also rated at a whopping 15 watts rather than the stock speaker's 2. Aura is a brand that I found reference to in yet another thread about alternative speakers. This produced a noticeable improvement but again nothing dramatic. I have no idea whether the wattage rating made a difference or whether the relatively quality of the new speaker did. Frankly, I did not expect this speaker to work in this engine but it does. I am mystified by how the sound board drives a speaker of that wattage rating.
So the results were mixed and most definite where the new speaker was enclosed.
I can't tell you whether "Fatboy" is a brand name or speaker type description and whether they are made by a particular manufacturer, although I have tried to find out. Lionel carry no small number of these speakers and enclosures/gaskets/mounts to go with them. I think that just swapping a Fatboy for a stock speaker won't make for an impressive change in sound quality; the mounting/enclosure of the speaker matters more.