An oil burner engine is an engine that uses oil as its fuel. The term is often used with reference to a locomotive or ship engine that burns oil to produce the steam which drives the pistons, or turbines, from which the power is derived. Some engines of this form were originally designed to be coal powered and were converted. An early pioneer of this form of engine was James Holden.
This is mechanically very different from a diesel engine that is a form of internal combustion engine, which is sometimes colloquially referred to as an oil burner.
Changes 2 & 3 are needed because oil firing produces higher temperatures than coal firing and can cause rapid erosion of metal. For a similar reason, the smokebox is sometimes painted with silver-coloured heat-resisting paint.