I really hope that's a ringed engine...

What kind of engine is it? If it's an ABC type engine, it might not ever run like it should because of an improper break-in. You need to lean that thing out and follow the directions that came with it (unless it's an O.S. engine).

Sounds like you might not be using the right fuel either...What kind of fuel are you using? What engine? What prop? We need more info...We can help you A LOT more once we know more.