Is it a just shortblock? If so, check for rust and pitting in the cylinders, they will rust if not protected for a while. Spin the crank to make sure it's not seized, and that all four con rods are still actually connected. The best single guage of condition I know of is to rub your finger on the cylinder wall, from about a half-inch into the tube to the top edge, there will be a little step there from the highest point the piston slides in its travels. If it feels like there is no step, the engine should be in great condition, if there is a pronounced step, it is worn and may need refreshing (overbore). If the cylinder walls are glassy smooth and/or have vertical gouges, it needs honing or overboring and honing, respectively.

If it is a longblock, about all you can do is spin the crank (without the sparkplugs in, of course ) and ask the previous owner how it ran.