ORIGINAL: Rodney
I fly quite a few older engines, mostly Quadra with magneto. I use regular 72 MHz FM radio and have never had any interference problems. I do use a non conductive throttle pushrod (usually nylon) and make sure I have no metal to metal items on the model that can rub together or vibrate. I find it difficult to keep 12 inches between receiver and engine, most of mine are probably in the 8 inch range with the battery and associated wiring right behind the engine and no problems in the last 15 years of gasoline flying. I do keep thing separated as far as possible though to minimize the possibility of problems with RF. Be sure to use a resistor type plug. If the part number has an R in it, it most probably a resistor plug. Keep you kill switch wiring in front of the firewall. In answer to ''do you have to use a separate receiver and ignition battery'', the answer is YES.
I used to set mine up as well as I could but I have even set them up with the throttle and choke servo on the engine box right next to the engine without problems. Then I finally got bit and the RF latched onto me. You do the best you can as far as keeping things away from the engine. Each battery, RX and Engine will also need there own switch.