New Dremel RotoZip or similar tool

Are the cutters and router bits, guides, etc. fine enough to do some basic lutherie work?

I have seen the rotozip recommended more than the dremel, mainly for light routing, has a guide, etc.
Also I was thinking of using the hole cutting bits for sound holes, opening for eq, etc.

Most of us use the dremel tools for inlay and they work pretty good for that. They aren't really heavy enough for bindings. I do use dremel for end graft. Overall a very useful tool for the lighter work.

StewMac has a whole slew of attachments for dremels that make many tasks easier. You just have to keep in mind it's limitations. And just because they say you can use it to cut the binding channels doesn't mean that its an ideal tool for it. Mine is relegated for inlay work and the occasional light duty task where it's just the handiest thing going.