What models of Carlson aircraft are still produced?

Carlson Sparrow Ultralight - Single Seat Ultralight Tricycle Gear

Carlson Sparrow Sport Special - Single Seat Conventional Gear Experimental Aircraft

Carlson Sparrow II & Sparrow II XTC - Side-by-Side Tricycle Gear Experimental Aircraft

What engines are suitable / commonly used in Carlson aircraft?

For single-seat Sparrow Ultralight: lightweight 2-stroke engines:

Rotax 277
Polini 202, 260, or 303
Simonini Mini 3

For Sparrow Sport Special

Simonini Victor 1 Super
HKS700E
Rotax 503
Rotax 582
Hirth F-23
Hummel VW

For Sparrow II and Sparrow II XTC

Simonini Victor 2 Super
Rotax 582
Subaru EA-81
Continental C-85
Rotax 912
Hummel VW

How difficult is the build / what is the skill level required?

Building such kits generally requires nontrivial mechanical / fabrication skills (metalwork, welding, fabric covering).
Build times are often in the hundreds of hours (400–600h)