I think you should do whatever you feel like doing. If you'd rather sell it as a whole, do it; if you're feeling ambitious enough to part it out, go for that.
If you do sell the engine seperate, you're going to have to truck ship it. Even if you could package it well enough to survive UPS or Fed Ex, it's way heavier than their weight limits allow for ground ship. I agree with Slits that you should band and shrink wrap it to a skid, but there's a certain way to do it so as to minimize the risk of damage in transit. I work for a trucking company, both as a driver and a dock worker, and I can't even begin to list the damages I've seen to freight because of inadequate packaging practices. Below you'll find a diagram of the proper way to band/strap the engine:
Click to view attachmentIt's pretty self explanatory. From the top view, the banding should run under the pallet as close to the engine as possible. Not all the way underneath- feed it between the space of the pallet. Hence the side view to give you a better idea of what I mean. Running the banding all the way to the edge increases the chances that it will be broken in transit, because it doesn't matter how careful a forklift operator is, skids get damaged; and if you run the banding all the way to the edge then the end boards get busted and the banding becomes useless. The engine is then just loosely floating around on the skid, and it will likely fall off in transit. If you ship the engine w/ the sheet metal in tact, I advise placing some kind of spacer over the top of the engine (2x4's are common) so that the banding does not contact the sheet metal, but is still binding the engine to the skid.
One thing I've seen places that ship used engines do is to put an old tire on the skid, then place the engine on top of the tire. It's mostly on engines w/ oil pans to make up the difference of the curve in the oil pan, but it also acts as a shock absorber since trailers can do a lot of bouncing moving down the road. It's up to you whether you want to do this or not.
And then: SHRINK WRAP! SHRINK WRAP! SHRINK WRAP!
I cannot stress this enough. This is one of the most underestimated packaging practices I've seen. Inadequate shrink wrap is one of the primary reasons why freight gets damaged- because customers think that one or two thin layers of shrink wrap is sufficient enough to hold a 7' high, 2000 pound skid together for the rigors of transport. Obviously the motor won't be that big, but you get my point.
And then, take pictures of it packaged before you ship it. Print copies to send to the buyer w/ the freight, and keep copies for yourself. Make sure to place them somewhere ON THE ENGINE, not on the shrink wrap, so that if for some reason the shrink wrap is removed during transit the buyer still has them. This way if the engine is damaged in transit, the buyer knows what it looked like when it was picked up, and can file a claim w/ the carrier instead of coming back on you for reimbursement.
That's all the advice I can give you right now. And for you and anybody else that has items they need to truck ship, don't be afraid to ask me how to properly package it if you're not sure. I personally hate trying to deliver freight that's damaged to a customer because it sends the message "We don't care about your freight." and that's just bad for business.
Good luck in whatever you decide to do w/ your car(s).