The engine choise is mainly personal preferance. I mounted a saito 72 on my ultrastick, and went through alot of props. I would break them on landing. The O.S. 46AX wouldn't be a bad choise. I think if you are going with a two stroke, maybe
bump it up to a 55AX. That or a 72 size four-stroke would provide plenty of power.
I would highly recomend you do not use the supplied metal engine mount. And if you choose a four-stroke consider mounting your tail surface control servos in the tail. My Ultra stick came out VERY nose heavy with the .72 and stock motor
mount.
As for servos, standerd ball bearing servos are all you need. I used futaba 3004s all around and never had a problem with servo stall.
The ultra stick 40 was my second plane also. It is a lot of fun. Useing a four stroke, and setting up the quad flaps really taught my a lot about engines and computer radio set-up. I used a futaba 9C for control.
Good luck and have fun.