I have been told that HPI used to do a nitro engine trade in. Upon e-mailing them I received a response that they no longer do the engine trade in. I guess this isn't a huge deal as my engine should be fine (will be receiving my trade soon). I was curious if anyone knows of any other trade in programs, or if they even really saved that much money to begin with?

Traxxas does it, send your old engine and get a new one for fewer bucks than normal price. If I remember right you can also trade your old one for an upgrade.

Does it have to be a Traxxas nitro engine to take advantage of the trade in program? I have a .18 hpi on the way that may need to be traded in.

Yes, traxxas only trade their own engines, & if they did trade others then I still wouldn't trade an engine in on a 3.3. Plenty of other engines out there that are better & don't cost a huge amount.

any recommendations on an engine for an hpi mt2 .18ss?? Nothing over the top, mostly just for backyard/ field smashing.

I replaced the 3.3 in my Revo with an O.S 21tm engine but I probably wouldn't do that again either, they are just small engines, not the size of a normal .21.
I don't know the truck you have but there are some good low cost .21 engines that might be good, depends if its pull start or roto start etc & what other engines will fit.
You might get more ideas in the monster truck section of the forum but if I was to upgrade an engine in a revo again I would change mounts & put a decent .21 engine in it.
You could probably do the same with the HPI.