Does a crank from a running engine need to be machined if new bearings are to be fitted? I was under the impression it only needed machining if the journals were damaged, but someone told me otherwise.
I'd atleast get it linished (just a quick tidy up of the journals, not a machine). However, if they're good, you will get away with just bolting it in and checking the clearances.
Would linishing require oversized bearings, or would that depend on the wear to start with?
No, it won't require oversize bearings. Linishing is basically spinning the crank up in a machine and running some emery paper over the journals just to tidy them up a bit. If there is any heavy-ish grooves or marks in the crank linishing won't get rid of that, if it has heavy marks the crank will need a proper grind. So, it depends how good it is to start with as to how it comes up with a linish, but an engine shop will be able to tell you straight away if it needs a linish or a proper grind.