Inside block paint
Two reasons to do it:
1) As C130 Chief said, to seal the block
2) To aid oil drainback - a little 'slipperier' surface so the engine oil drains back easier and quicker to the pan
Overkill? Probably
Necessary? No, but like chicken soup when you're sick, it sure can't hurt
I've done it on all the engines I've built, and Rustoleum red primer works just fine.