On my girlfriends LT-40 i use a thunder tiger GP42 which is rated at 1.1 horsepower. Same engine i used on my PT-40 that i learned to fly with.

That being said the horsepower ratings are way overated. if you check the rpm they are rated at you will never hit the rpm they rate them at unless you run a 9x4 proppeller or something like that. Both engines you have listed are more than enough power for an LT-40. Like the first post said OS quality is top notch I don't know how the SK engine will hold up. But considering a lot of trainers seem to get landed nose first might not be a bad idea to try the less expensive engine that way you can be the expert in how long it will last.

Now for a few of my opinions like them or not they are my opinions.
Myself i prefer a bushing engine to learn to fly with than a ball bearing engine. Don't have to worry about bearings anything like that. But i have known many many people that swear by the ball bearing engines to learn with. So to each their own. Good arguements for both sides. Of course i also try and get people to try Zinger 11x4 and 11x5 props to learn with also. Keeps the speed down. Yes you break more props that way. But you also don't have a big plastic prop that survives and leverages the firewall out either.

Dennis