Hi aerialpixs,
I've been doing photo laser engraving for the past five years. We deal with anything from Alder wood (most popular) to stainless steel. It's definitely, something that will take some practice to get it just right. I think I have something like 20 different settings saved for all types of material. I learn something new each time I do a photo, especially when a customer supplies you with a really bad photo (been there way too many times).
I run a 30W VersaLaser with CorelDraw and I use my own Laser Photo engraving sofware. There's one other stand alone product called PhotoGrav, which does work, but expensive for what it does and a bit buggy.
I wouldn't recommend going with a VersaLaser, unless you have a rep in your area. The problem I ran into is my rep quit and I was stuck with zero support. I would seriously think about coltons customs suggestion and go with an Epilog mini at the max 45W. It'll cost ya a bit more, but you'll be much happier down the road. I would also suggest getting an industry standard table 12"x24" or larger. The Vl200 from ULSC only has a 12"x16", there's been many times I've had to turn down commercial jobs because I couldn't fit the pieces in the machine.
When doing photo engraving, don't let them sell you on the 1.5 lens. You don't need it. For best photo results, you'll run the DPI at around 250-300. One of the high detail lenses won't buy ya much at least from what I've seen.
Photo engraving on glass unfortunately doesn't work well at all. Glass engraving alone is a challenge with C02 lasers and the detail required for a photo will typically be washed away. I have had success lasering on optic crystal, but it's too pricey for customers'.
What's always a blast to photo engraving is Onyx Marble and Black Granite. Both have their challenges, but the results are quite impressive.
Leather photo engraving looks nice as well, it just STINK up the shop pretty badly.
I hope my info helped some.
You can see some examples of our photo engraving. The top of the page has a variety of different material engraving as well.
http://www.nosplinters.com/plaques.htm
Good luck!
-Ed