There is nothing as satisfying in TF as being an engineer and watching the enemy offense run into your sentry again and again, EMPing the heavy offense and generally being a pain in the butt.

General tips

• Don't get blaise about upgrading, repairing or giving ammo to your sentry. Ensure you are not standing in front of it when performing these functions. There is nothing more annoying than getting too friendly with your sentry.
• After you have built to a level 1 sentry it will only take a discard from a teammate to up it to level 2. Work with a team mate to get it up ASAP.
• Place your sentry where the enemy will have to face the sentry head on to kill it.
• Don't EMP your own sentry or dispenser... it's a dumb thing to do. Your EMP grenades can hurt people through walls and ceilings.
• Don't set your sentry up too far from your source of materials, this can double the time it takes you to set up your sentry.
• A dispenser can be used to block an enemy from moving out of your sentry's LOS. It's a lot of fun watching one of those persky scouts trying to bolt past your sentry and into a doorway only to find that the doorway is blocked :)

Defending your sentry
This is very important.. use the sentry in a manner typical of many bullies. The sentry is used to take out an enemy after you have picked a fight with them. An enemy that is busy dodging your railgun or shotgun shots and grenades is often too busy to sneak up on the sentry and take it out. Occasionally you get a cool player who pretty much ignores you and attacks your sentry. Basically you need to do as much damage to the enemy before they have a chance to engage the sentry to minimize the chances of your sentry being taken out.

Grenades vs your sentry
Napalm grenades would be the most often used sentry killer in the game, because of a flaw with tf 2.8 and below the napalm grenade can airburst in mid-air and continue to explode from the initial explosion position. Enemy offense making "jump shots" can seriously make keeping your sentry alive a very difficult task. The main thing to do in this situation is heal the sentry half way through the life of the napalm grenade. The command "SBAR_ON" will allow you to know when it is the best time to jump into the flames and heal it. When the sentry get's to about 110 health jump in and keep healing it until you die or the napalm dies out. On many occasions enemy offense have announced that my sentry had been taken out (because they were too confident) and a group of unsuspecting enemy rush in and get mown down.

• MIRV grenades would be the most effective way to kill a sentry i have seen. A MIRV is almost a definite kill if the grenade can be laid anywhere near the sentry. The only way to keep your sentry alive is to have it placed up high with very little ledge space around it for the MIRV to land.
• Nail grenades are usually nothing to worry about UNLESS they land close to the sentry. Generally position yourself so that the sentry is shielding you from the nails and keep repairing the sentry.
• Normal grenades are annoying, especially if the enemy manages to sneak a spy in to kill the sentry... once a spy has offloaded 2 grenades in quick succession you can kiss your sentry goodbye.
• EMP grenades are also annoying, depending on the version of the server you are playing on they can either take out the sentry, seriously harm it or do nothing at all.

The Dispenser
You can use the dispenser to help with the defense of the sentry. On Bam4 for example you can place your sentry on the hump in the corridor to the flag room, you place your dispenser just in the mouth of the corridor (just around the corner so that the enemy don't see the dispenser until it's too late). You can let the wimpier classes through but you can detonate the dispenser when one of the nastier classes get there (soldier, demoman, pyro).

• Ensure that you keep your dispenser loaded up with extra ammo and armour. You can use the dispenser to help provide materials to rebuild a new sentry or as a claymore mine. The more ammo in the dispenser the more damage it does.
• Use your dispenser to block routes into your base ... the short ramp in the ramp room in 2fort5 is a good example.
• Set up a dispenser in the enemy base for lots of laughs... let the players use it for a while but explode it when you need a hole in their defenses.
• Use it to block lifts from moving all the way down or from moving at all.
• Have detdispenser bound to a handy key, this will make it easier to detonate the dispenser quickly.

Other tricks
You can be a true bastard by having a key bound that discards ammo and primes your EMP grenade. Ensure you have lots of rockets and when an enemy approaches discard at them and give them the EMP.....

Aliases and commands

Sentry:
This will build a Sentry Gun:
bind X "build;wait;impulse 2"

This will detonate your Sentry:
bind X "+detsentry"

This will add ammo to the Sentry:
bind X "impulse 1;wait;+attack;wait;-attack;wait;impulse 1;echo Adding Ammo"

This will upgrade the Sentry:
bind X "impulse 1;wait;+attack;wait;-attack;wait;impulse 2;echo Upgrading Sentry..."

Dismantling the Sentry:
bind X "impulse 1;wait;+attack;wait;-attack;wait;impulse 4"

Rotating the Sentry:
bind X "impulse 1;wait;+attack;wait;-attack;wait;impulse 6"

Dispenser:
This will build a dispenser:
bind X "build;wait;impulse 1"

This will detonate your dispenser:
bind X "+detdispener;echo Dispenser Blown"

Class binds:
bind X "reload" This will reload your shotgun.
bind X "ID" This will ID the player. It will show his name, his armor, and if he is friend or foe.
bind X "saveme" This will yell for a medic or an engineer.
bind X "inv" This will tell your inventory of grenades and EMP grenades.
bind X "+gren1" This will prime a grenade and throw it for you. If you hold the key down, the longer you hold the grenade. Remember the grenade goes off in 3 seconds.
bind X "+gren2" This will prime a EMP grenades and throw it when you release the button
bind X "discard" This will drop stuff you don't need. This includes rockets, so be careful!
bind X "dropammo" This will bring up the drop ammo menu.
You could also make an alias to drop specific items for your teammates:
bind X "dropammo;wait;impulse 1" This will drop/make shells.
bind X "dropammo;wait;impulse 2" This will drop/make nails.
bind X "dropammo;wait;impulse 3" This will drop/make rockets.

Other resources:
UKFN Tactics for Engineers
The Citadel
TF Guide class strategy for Engineers
Engineering 101