The Steam Engine requires two things: Water and heat. Water can be supplied either by buckets or by Pipe, connected to the back. Heat is supplied from below, usually either with Lava or Fire; the best source is Fire from burning Netherrack. Once the Steam Engine's temperature reaches 100C, as long as it contains water it will produce 32 Nm Torque at 512 Rad/sec, for a total of 16.384kW Power. Its output makes it suitable for powering most early-game RotaryCraft machines, although its low Torque makes it usually require a Gearbox.
Slight caution must be taken with the Steam Engine in two cases. First, if the temperature of a Steam Engine reaches 150C, the Engine will explode. (Fire should heat the Engine to about 125C, but Lava can heat machines up to over 600C.) Second, if a Steam Engine at 100C or above contains no water, and water is pushed into it, the Engine will explode.