[classicchrisk]

Yes, the rally rules require in line. However, there are exceptions for some events. 
The advantages of the Long Can vs the S Can are that the Long Can has almost twice the torque of the S Can, for the same rpm motor. And, the extra weight helps lower the centre of gravity. The Flat 6 is another option, has a bit more torque than the S, but not as much as a Long. It helps lower the centre of gravity and is shallower, so may be the only option in some cases.

My preference is to go for 21,500 -22,500rpm Long Can motors as these have 300-450gm.cm  stall torque, gearing can give you the top end or bottom end performance you want, and, regenerative braking seems a lot better than on higher revving motors. I think this is probably due to the amount of rotational kinetic energy that is present in the higher revving motors at the top of their rpm range.

I've seen a Scaleauto Junior motor, which is 18,000rpm and 300gm.cm. This may be even better for acceleration and braking response, so am tempted to try one. I am just a bit nervous that it may not have the legs for our club track main straight, but should be good on all rally tracks.