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To answer your questions a bit I would suggest you look for a beast chassis, 4 coil over suspension with a rear sway bar. Make sure you get a frame that you fit in, both width and height. A lot of cars are short and people are driving with their heads basically sticking out. I recommend at least 4" of head clearance. Beyond the safety stuff you will want a good set of shocks and a few spring options as well as a few rear wheels to have stagger choices.
For engines the D2 package is a mixed bag. You can probably find an old focus engine for cheap, but it will be severely under powered. Up from that the Chevy ecotec engines make a bit more power for a reasonable cost I think. The Honda D2 engine is competitive but more expensive I believe. I know the Badger guys are doing some cool things with their engine package as well that is probably worth looking into.
Outside of that you will be able to find all kinds of "full" midget engines for varying costs. Old Chevy head engines are pretty cheap and mostly reliable. Old Ed Pink Ford's are still floating around and make pretty good power. Even some old Mopar W9 engines around, but reliability on those can be a concern. Esslingers will be more pricey but definitely faster. Even old Fontana engines for a good price will work for you.
Just depends on your budget and what you are wanting to accomplish. If it was me I would go with a beast/esslinger combo for a full pavement midget and a beast/ecotec for a D2 pavement midget.
My brother and I raced pavement and dirt midgets for years on the west coast and the midwest. If you ever have any questions do not hesitate to ask.
-Alfred
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