I just use kerosene and a rag to clean, with the help of various size screwdrivers to get into the nooks and crannies. Knock all the loose paint off. After that, I wipe the engine down with paint thinner. I mask with duct tape and do the fine detailing with a razor blade.

As for paint, I opt for Plasticoat (sp?) because you can do touch up any time and not have to wait a week between coats.

If the engine is real dirty, turn on the radio...you're going to be there a while.