[Al_The_Man]

Baris & Hu, The other point to make on the subject of VFD is that if you have a 4 pole ac motor (1740 rpm) you can usually run it up to the speed or a little higher of a 2 pole motor i.e. 3420 rpm.
A lot of VFD salesmen will tell you you should buy a VFD rated motor due to the higher winding insulation etc. But I have not experienced a problem using regular motors, as far as top speed is concerned, the test to do is to set the VFD to 120hz max and with the motor disconnected to whatever you are driving, gradually increase the speed above its rated speed and check for high vibration which indicates an out of balance condition. If everything is smooth you should be OK. I would not suggest going much higher than the rated rpm with a 2 pole motor as you may get the armature fly apart on 120 Hz.
Hu, I believe you are referring to sinusoidal commutated AC servo's driven by motion cards such as Galil, which require to two axis assigned to one motor/drive. But there is an alternative which is to use DC brushless which has a couple of up sides and that is that there are no brushes and the top motor rpm is usually around double the DC brush type. Practically all DC brushless motors have a built in encoder alongside the commutation tracks. So with things like planetary gearboxes (cheap on ebay), a high reduction can be used resulting much smaller motors and good motor-to-load inertia which is normally kept to less than 10:1.
The down side is with very low reduction ratio's they are not that smooth at low rpm.
Al