If you check my signature, there is a link to the ".12 Engines KB". Once you get to the site, click on the "Get Smart" link on the left. Buy that book. It will help explain a lot.
There are also three articles on engine basics at this site: http://www.nitrorc.com
The OS TZ engine (Non-Speed Tuned version) is a great starter engine. Add on the Skyline Racing Development VR12 Plus pipe and you should be all set.
When choosing an engine, you want the slide carb.
Overheating will cause an on-road engine to detonate.
3-Ports refers to the number of intake ports.
In general almost all 3-port .12 engine are considered legal, but the sanctioning racing organizations (ROAR, IFMAR and EFRA) have specific rules. Since you're in the USA any ROAR/IFMAR legal engine should be good. You can download the ROAR rule book here: http://www.roarracing.com/rules.php
and read through the sections on engines.