the obvious part : first, you take the entire motor out of the car. then you strip it to pieces, taking the head off, the accessories off, the timing belt, the water pump, the oil pump, the balance shafts, the oil pan, the main bearing cap/bridge, the bearings, the crank, and the pistons.
now, to elaborate a bit on what anubyss said:
the basic goal in "building" your motor is to make it stronger. on our motors, the pistons are the weakest part, so you want stronger pistons. while your at it, you want stronger rods. forged is stronger than cast. while the block itself is not that weak the cylinders are unfortunatley made of a material which will probably cause problems with those stronger forged pistons. so you get the block "sleeved," which is the process of replacing the cylinders.
when GE sleeves a block, they take the whole thing and drill out the existing cylinders. then they fit much stronger steel sleeves in in place of the ones they just removed. they also laterally brace the sleeves against the rest of the block.
after the block is sleeved, the cylinders need to be made the correct size for your pistons. this is called boring. they drill holes in the new sleeves to the proper size and with the exact spacing. the next step, honing, is cutting a very fine crosshatch pattern into the inside walls of the cylinder sleeves which helps the piston rings control the oil coming up from the crank case and squirters.
the weights of the new pistons and rods are different than the old ones. ideally, you would balance the entire rotating assembly including the flywheel, but it's not necessary. polishing the crank makes it's surface smoother, which reduces the rotation friction against the oil in the crankcase. there are also other processes that can make your crank stronger, or reduce it's resistance further (knife edging.)
after this is done, the pistons, rings, rods, and crankshaft need to be put back in the block. the bearings which go between the crankshaft and the block will be replaced. in most cases, the main bore of the block (which is where the crank sites) and the bearing caps will need to be machined as well, since the sleeving process twists the block up a bit. this is done, bearings of the proper thickness are selected, and the block is reassembled.
the head goes on the block next, and a possible area of concern here is the joint between the two. very high levels of power can blow the gasket between the head and the block. when the block is sleeved, the sleeves can be set to stick up slightly from the deck of the block, which will result in a very tight combustion or "fire seal" against the head. another way to acheive this is with a headgasket that has a thickened fire ring, such as cometic's turbo gasket. these gaskets also come in varying thicknesses should you want to raise or lower compression.
the head itself need to be held onto the block, which is what head studs or bolts do. a serious rebuild will replace the honda head bolts with ARP head studs (now that they're finally available!!!!)
the valvetrain in the head itself can also be strengthened, but i don't know anything about that.
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