I'll go against the crowd and stand up for the Harbor Freight 2.5 hp. It's a really nice little engine, but with a few weak points. It has a crappy air cleaner, and the pull rope isn't really a rope, it's more of a string wearing pajamas, disguised as a rope. Also, the bolts holding the gas tank in place have a bad habit of backing out, and then when the tank gets loose it jiggles around and develops cracks around the mounting tabs.
I have one of these engines on a go kart and another one on a mini bike. Both of these are set up with jack shafts and a high ratio to go about 12 mph, which feels pretty fast when you're on a gravel driveway 1/3 mile long.
The kart will carry my 240 pounds up a hill, barely. The bike has half the ground drag because of only 2 wheels, and it will accelerate me up a hill nicely. I feel a pretty respectable acceleration on the bike on flat ground. I have a ton of fun with it. The kids really tear around on both machines, and the kart does donuts and throws dirt.
I think this is the perfect engine for a kid's kart. It likes to start on choke. Once you learn its personality you'll have a great time with it. It's a really great little engine. The kart has 10 teeth on the engine, 17 and then 9 on the jack shaft, and 54 on the wheel. I'm pretty sure I have the bike geared one tooth different on the jack shaft for a greater top speed, just because it will handle it due to the reduced rolling drag.
I encourage you to give it more thought. This is a really nice engine. Just be sure to use a better tank, air cleaner and starter rope. I built an air cleaner from a tuna can for my bike. It works pretty good, although I'm still making the final adjustments.