Engine mounted upright is standard on a Dirty Birdy. Any standard sport engine with side exhaust and stock muffler should be fine. A modern .46 will make this thing scream.
One aileron servo vs. two is pretty much a personal choice. I find the little extra weight is worth the bonus of not having to mess with torque rods, worth the extra stiffness and worth being able to use your computer radio to get throws to match exactly. But I rarely fly smaller than .60, mostly .90 or larger. The larger planes tolerate the weight of an extra servo much better. On my .40 size planes, I usually use a single aileron servo. With careful setup it works every bit as well as dual servos and saves you a little weight at the cost of having to install and adjust torque rods.
Do you have the wing? If it's already built, I'd definitely use it as it's built.
Like I say, it's builder's choice on that one. But to quote a great builder "Lightness is next to verticalness."
Either way, you'll love the Dirty Birdy.
Dave