An engine is made up of thousands of parts. These parts can have different service lives, this means a lot of parts in an old tired engine can be reused. There are a number of processes involved in rebuilding an engine which are used depends on the proposed purpose of the rebuild. used engines
First of all is the most basic of rebuilds this would be a basic re-ring this involves the replacement of the piston rings quite often this would include gaskets if they aren’t reusable and bottom end bearings. This is a great cheapish way to extend the life of an engine as most of the expensive parts are reused and the labor required is minimal compared to other rebuilds.
2nd is the most common sort of rebuild in the enthusiast market. Older engines quite often have cylinder wall damage usually slight gouges and scratches this reduces the ability of the rings and piston to seal the combustion chamber effectively. To remedy this situation engine builders bore and hone the cylinder bores. Boring a cylinder bore removes some metal around the bore which increases its diameter. Honing a cylinder puts cross hatch markings on the cylinder wall this allows the new rings to bed properly increasing its sealing ability. Increasing the diameter means you also need to replace the pistons and piston rings. An added advantage to this is an increase in engine capacity which along with the better cylinder pressure increase the power the engine will produce. Obviously this rebuild also includes the gaskets and bearings as used in the first.
Lastly there is a complete rebuild. This is reserved usually for the full on racers and those seeking all out performance. This rebuild includes all of the above mentioned processes and includes the replacement of other higher performance parts. After a bore and hone or simply a hone the pistons and connector rods are replaced with performance variants these are often both stronger and lighter then the originals. Then the head and block will be machined to ensure they are both perfectly flat to ensure maximum seal between the two sometimes an o ring groove is machined in at this time too. In a high performance rebuild the engine is going to be exposed to higher RPM and because of this the big end is bored to ensure it is round and true. Also the rotating assembly is balanced.
The world of engine rebuilding is an art at the high end but don’t be deterred anyone who is mechanically capable is able to do most things outside of the machining and boring. There are quite a few engine specific engine rebuild books on the market which have all the information you will need.