Inlay work? I never thought of using it for that! Sounds like you're accusing me of being less than truthful Pete.
It's indispensable for little jobs like drilling holes for tuners, polishing frets, installing pickups, drilling holes for bridge location, trimming binding and purfling, cutting side sound ports, cutting the binding channel on the heel end of a cutaway, cutting a .004" rosette channel (try that with a router!) and dozens of other tasks. Like admitting to watch reality TV shows, it's fashionable to put down the Dremel as rubbish. I'm a fan of both!
The Dremel I really like is the pistol grip cordless one. And they're total junk! I've gone through three of them within the past two years but they get used a lot. (The transformers go out because of my solar power system.)
I've got usual dozen odd routers and trimmers that everyone else has that do some jobs like no other tool can, but the portable Dremel is always close by.
The bottom line is, in order to be efficient, you need every kind of rotary tool available.