Matt your needle settings have nothing to do with his motor, every motor is different even if it's the same model motor. I've had my 2.5 at 2 1/2 turns out on the top needle while my buds was 4 turns out and they were both tuned right.

Traxxas26, sounds like it is to rich or the clutch is fried like Mike said. Both of those things will cause it to not idle well.
Being too rich will cause it to bog down on takeoff, and a fried clutch will just make the truck act erratic, it could hit high rpm and not really move or it will simply kill the motor on take off. etc.....