Tower Controller described his failure to use correct phraseology during a takeoff event; noting the old 'position and hold' phraseology was used and no required traffic advisories issued.

Narrative

[I was] working Local Control position with three single engine aircraft doing touch and goes; making right traffic on Runway 10. An E50P was number two for takeoff behind a Cirrus at C-4 (full length). I heard the Ground Controller taxi the E50P to C-3; as the Cirrus at C-4 had not yet called ready for takeoff. The Ground Controller told me that the E50P would be at C-3. At this point a there was an aircraft on the runway between C-1 and C-2; starting his takeoff roll from a touch and go. After scanning the upwind; I looked back towards the arrival end of the runway and observed the E50P enter the runway at C-3; turning towards the runway end (C-4). I asked the E50P if he was on frequency; and after a slight pause; he indicated he was on my frequency. I told the E50P to position and hold on Runway 10. I then told the traffic on the downwind about the traffic holding in position. Once I had the required runway separation between the E50P and the upwind traffic; I cleared the E50P for takeoff. When instructing the E50P to hold in position on the runway I used the old phraseology; 'Position and Hold.' I also failed to issue the downwind traffic to the E50P. Recommendation; I do not know why the E50P entered the runway without a clearance; so it is difficult for me to propose a remedy for the runway incursion. As to the incorrect line up and wait phraseology and the omission of the required traffic call; I hadn't been intending to use LUAW at all in this situation. I personally use LUAW very infrequently. When I intend to use LUAW; I mentally review the requirements before using it. I will be reviewing the LUAW requirements on a regular basis to remain proficient in its use.