If all you want is a reliable car to drive around in and you'll give it a bootfull occasionally, then a properly-checked second hand engine would do the job perfectly well and would be cheaper too.
Depending on what's wrong with the engine you already have (it could be a blown head gasket, rings, bent valve, whatever) the third option you might not have considered is to do a repair - sort of a rebuild but without going the whole hog. Fix what's broken and get it going again, keep the stock pistons etc.
From the sounds of it though, you'll be treating it like it's been stolen so a rebuild would be the go, it'll cost you more but you know what's in it, you know it's fresh, and if you're going for bulk horsepower later on and you already have an engine capable of handling it, you're set.
Up to you really, but it depends on what you want to do with it