Are you planning on racing? If yes check the rules @ the track you are racing at regarding the engine. From my experience and some other GT racer can agree that sometimes the engines are not a winnning factor. Meaning you can win with a $150 engine against other more expensive engines.
As far as recomendations I preffer .21 engines I've ran the OS .21vg with great success and its relatevely inexpensive. The OFNA .28 Force is also a great motor... again depends on what you are going to use it for. Many motor drop right in.
Upgrades you should def. Get the new 2 speed (shoe type) tranny, front cvd's. Better servos (spend one time and buy good servos from the getgo)
Xray NT1 '08 /'09 EC LRP12R / Serpent 720 '08 RB Concept V12, R3 RB mods, V12 Rody, Matrix RW / Serpent 733, 733TE RB T9 / EA RC8T OS .21 Vspec speed tuned / Kyosho Inferno GT, GT2 / EA SC10 / Serpent Cobra GT coming soon!