I only have a manual pantograph that I put together, but for the time being It only uses a dremel. Tips I can think of is don't use cheap bits (especially for cleanup passes), and check it for run out when you chuck a bit up into It. Like a lathe sometimes, they may need to be rechucked several times. I usually just look for the runout, by eye balling, and that is enough for me. seems like the shorter the shank, the better also. I don't know why, but to me it seems the longer the bit/mill is, the more chance it will runout some on the end. I guess that could be said for something chucked only on one end of a lathe also though. If the dremel is worn out though, then none of this may help. Mine was brand new, bought for the machine when it first started going together. Some may come with alot of runnout new for all I know, so possible I just got a decent one or something. I've heard of others having alot of spindle runount with dremels that may have been too much, and the bearings are'nt exactly designed perfectly for these type operations either. heck if you already have the setup though, I say give it a shot. Should be alot of usefull experience for only 100 bucks. I'm sure i'd give it a go at that cost. I'm looking at quite a bit more then that, just for a decent controller & steppers to power My own.
With a cnc, not My area, but I would think the key might be setting Your offsets & tooling paths up correctly to work best with it, and not trying to take out too much material in too small of a number of passes on the cleanup portion. I basically use 2 bits, one for hogging, and one for cleanup, and in My situation is alittle different, because i have to make stylus that work together with both bits to make the males fit tight to the pockets, but I have been able to do it, and the dremel was used to cut both parts out. Ofcoarse I would always count on a spindle upgrade in the future just the same, cause the dremel is kind of like bringing a knife to a gun fight, only that may depend on who's holding the gun. It can get the job done, but may take some extra attention to detail, and a few tricks to get the results you want.
Good luck with it. Please Keep us informed on how it goes through your project. I know i would enjoy seeing how it works out.
Greg