Sorry for late reply, didnt check on the thread...
Well, city 05 is a really nice car.u dont need to worry about anything.as for how u can see if engine is in good condition or not, that is a bit hard for me to tell.
try to find a car with less milage, lesser then 1 lakh... the overall condition of the car will be telling the story about its engine.if the body is messed up, its a good sign that engine has also gone through the same...
find a car with less milage, clean engine, interior exterior etc... idsi engines are hard to see if they r in good condition or not (or may be i cant tell bcuz i havent seen a messed up idsi engine yet) but still, listen for engine noise, any extra noises u can hear? any visual clues of engine opened? any oil leaks ? etc...