I think a lot of people use Ben Nye's facepaint, and I've had decent results using a TON of eyeshadow for shading. This doesn't crack at all, though it does involve touch-up if it's for more than photos. I would absolutely not use oil paints. Look on YouTube for monster makeup tutorials for specific brands and advice.
Snazaroo is an awesome water-based, non-toxic face paint. It washes off with just soap and water with very little scrubbing required, plus, it is inexpensive! Snazaroo does not crack, either. You can buy it online, including on eBay and I believe Amazon. We used it for this shoot: [link]