i have recently had a recon engine fitted in my 96 sti impreza and when u start it up from cold it puffs a bit blue smoke, when i spoke to the fitter who put the engine in he told me that the car from a 96 to 98 engine where designed to do it, apparntly dropping a bit of oil on to the turbo to lubricate i find this hard to believe, but the engine has no smoke any other time. just wondering whether anybody has any idea if this is correct.

 

The turbo has a permanant oil feed off the back of the right hand cylinder head,so no oil is actually "dropped" on the turbo.
Smoke on start-up could be a worn turbo or a bit of oil passing the rings or valve stems. Provided the smoke stops after start-up then i wouldnt worry too much about it as if its a freshly built engine,it take's time to bed the new rings into the fresh bores.
You might even have residual oil from your old engine in the inlet manifold,headers or a MAF sensor on its way out.

Mick