Jon,
I had thought about this also. It seemed at first that it would be simpler to do as you mentioned by placing a rotary axis on the head.
But following the thread on building a spindle (
http://www.cnczone.com/forums/showthread.php?t=7004), I sort of had the thought of going the 3 phase/VFD route and using pulleys to determine spindle speed range. I think this might make for an overly cumbersome head assembly to throw a rotary table into. Realistically though, your arrangement might just simplify programming over what I am thinking.
I have a simple SW rendering of my plan, take a look in my gallery for the pic. It basically has two pillars which are mounted to a XY platform. The pillars support the cradle with large diameter bearings, allowing the cradle to pivot about 60 degrees forward and aft. A rotary table with about an 8" chuck would sit in the cradle. I plan on a beefy Z axis as well.
Jim