On Using oil and Acrylic paints on your model.
From an artists' point of view, by RichieC
I am an artist who is also a model ship builder.
Now I'll start off by saying I am a commercial artist who was trained in the old school where we drew things by hand, I get to paint from time to time when I have a minute, but now I mostly work on my Mac!
Paint is all about pigment and pigment is expensive. Some of the ingredients that are ground up for pigments are toxic- the cobalts for instance, and some are rare and very expensive making certain colors go for $20 for a small tube. That's why certain colors are more expensive then others- it depends on what they had to grind up.

To tell you the truth, it never occurred to me to use my oil colors on the ship- I'll have to rethink this! I mention oils because I would never use acrylics. I find the colors to look more plastic and they sometimes don't stick as well to certain surfaces and they sort of float on top of the surface. They mix with water but dry very fast and once down are not reversible or re-workable. Oils just look more natural to me- though there are a lot of new choices on the shelves out there for acrylics, alkyds and similar- oils have been around since DaVinci (He experimented with the new Oil paints on the Sistine Chapel).

Damar varnish is indeed a protective medium for oil paintings. It is used because it can be workable, as a painting is worked on, layers of varnish are applied so that new layers of paint don't "mess" up the earlier layers. So you can paint over it without adverse effects to the painting nor its stability -- and it is reversible- it can be removed, (if you know what you are doing, that's how curators can really "clean paintings").

Oils are usually not used straight out of the tube. They are thinned with mediums or carrier agents. Gum turpentine, linseed oil and even a dash of damar varnish is all mixed together in a cup on my palate and I use that to mix with the paint to make it workable. There are a lot more available- not sure how they work. Check Here: Dick Blick Art Supplies/oil mediums. You might recognize some of those as ingredients in wood finishes for furniture etc! Therefore I would think they might be fine for ship models, offering the same permanence of high grade pigment they offer for paintings.

If you are worried about the oils in the paint penetrating your ships wood, I would think you could prime the area with a damar varnish or even shellac and then paint over it, or perhaps any of the primers for canvas or wood panels called gesso or other similar products for preparing surfaces to accept paint. Id follow up with another coat of damar to protect it. If you don't want the gloss there are dulling agents available as well. I'd practice with thinning your paint till you get the desired "flow" so that brush strokes will disappear, Know that the more turpentine you use the faster the paint will dry, the damar varnish will give a deep sheen and it makes the paint a bit transparent, the linseed oil makes it dry slow and remain workable. The interesting part for me is that you can go in later and re work the area if you need to, it brush strokes are visible etc.

Finally, when mixing a color, make sure you mix enough, It might be impossible to match your custom mixed color again if you run out.
This is experimental I suppose, but I think with common sense in thinking it through, it should be fine! Thanks for the inspiration and the epiphany- now what to do with the set of floquil railroad paints I have! 
 Everything is I have written is from an artist's point of view and in art everything goes- so temper what I write and think it through for yourself on how you might apply it.
Most of my experience has been with oils, so while I might seem one sided on the issue, it is more that I am commenting on what I know. Therefore I am the farthest thing from being an expert on acrylics. As I remember, they were invented and promoted to professional artists for several reasons. Quick drying times, the ability of building up thick- heavily textured layers that dry in ones lifetime, the ability of creating glazes quickly (very thin transparent layers of colors , many deep that give a painting a depth, like painting on layers of very thin glass), finally-- easy water clean up. You can do all of these things with oils, except the water clean up, but they are slower to dry especially if applied thick!! Oil paints don't dry totally through evaporation of the thinner, they oxidize or change- harden through more of a chemical reaction. The more you thin them and apply thin (which is probably how you will use them anyway) the faster they will dry.

In the end, the same pigment is used for both acrylic & oils- it's the medium that is different. Pigment mixed in a wax is called a crayon ( a far cry from what kids use as they have very little expensive pigments in them- mostly wax). An interesting side bar here is that egg tempra, made by grinding up a pigment to a fine powder and mixed with egg yolk, is about as permanent as you can get! It is very dull and needs a varnish to get glossy. Who knew- you'd think the egg would rot- has something to do with the chemicals in yolk- sulphur is in there I know. But then using common sense again, ever try to clean fried egg yolk?- makes it through the dish washer and peels paint off a car! However, I do not think this would be good for models!

It is my opinion that none of the characteristics of acrylics I mentioned above are particularly useful for small scale (obviously), though you can certainly thin them down to flow nicely and etc as you have no doubt done. I have had trouble with the acrylics drying on my brush while using them- you have to keep your brush wet and clean it often. Paint that is left in the brush or that seeps up into the feral (sp?- the metal band that holds the hair) and allowed to dry will never-ever come out. With oils- A dip in a container of gum turpentine or in really hard cases, lacquer thinner, will melt dried oils no problem. Also, oils work great in very small brushes 0000, the oils will allow the paint to flow and you'll be able to hold a very fine line- thus, I think you'd be able to paint small details/trim much better.

I think the high gloss I would normally want to attain on a painting is probably mostly undesirable- to a point as you mention, I have gotten colors that appeared dull by accident, and I would have to experiment to figure out how to get that to happen consistently. However the issue was "would they work" and "would they adversely effect the model" I believe there is no reason I can think of why they aren't perfect on both counts!

Hope this helps for what it is worth from my experience. I can't say I know any of this from experience with models. I do know that a trip through the Louvre will show thousands of very old paintings on everything from wood panels, to frescos, and canvas, and that they work and stick and are durable there.
A bit of advise on supplies:
 Don't get a big tube of paint, I think that would be a lifetime supply, especially if you are experimenting. The little ones will go a long way! Get a tube of titanium white to lighten any color or use itself, or paynes gray (not black) to darken one! They have paint swatches usually next to the paint displays, you'll have to figure out how to get to the color you want. You need gum turpentine (from anywhere- the art stores charge too much), and a paint medium (read the labels to figure which one would be the best), damar varnish and get a good set of say three sized sable brushes size 5 down to 000 (you can tell if they are good by the price and the length of the hairs- longer hairs hold more paint and will not require you to dip back as often, take care of a good brush and they will outlive you), you might even consider water color brushes in the smaller sizes. Clean them in gum terp and then shape the hairs carefully and allow to dry so they are little stiff. Store your brushes where the hairs are protected, don't break the hairs apart after they are dry and never leave a brush standing in a container hair down or you will have a brush that is ruined and doesn't behave! When you are ready to paint next time, a dip in the terp will soften the hair and you'll have trained the hairs to the shape you wanted with no flyaway.

 BTW- Damar varnish is spray able and even comes in a spray can- you could mist your sails in layers, though I'd probably not use the spray can if you didn't have to, (might be too thick or inconsistent) I'd run it through an airbrush. It dries pretty fast!