Hi Derick - basically, the lower the KV, the more torque and less RPM you have. I run a Tekin 1900kv T8 Buggy motor in my 1/8 buggies. As far as a servo goes, I really wouldn't go below 150oz - I run a XP 1015 servo in all of my cars and it's a great value for 1/8 applications due to it's good torque and great speed.
One thing you definitely don't want to skimp on with a 1/8 vehicle is your electronics - the only 3 systems that I would put into a 1/8 car would be a Tekin, Castle or the new LRP system - the cheap Hobbywing stuff just won't cut it in a true racing application. You'll also want at least 5000mah 40c batteries - I prefer to run a pair of 2s Lipos rather than one 4s since I can always take those packs and run them in my 1/10 stuff as well if need be. If you have any questions, feel free to ask me at the track!