Hello,
From what I gather, posts of this sort are pretty regular around here, so I'll try to keep it entertaining.

I'm new to CNC; myself and some partners are looking into starting a business that would require prototyping of shapes, possibly some that I do not believe a human can make (precise, nonlinear surfaces). It's a robotics company, so naturally we anticipate the need for many strange parts, some of which would become rather expensive at eMachineShop. If you're wondering why a bunch of people that cannot machine parts think they can start a robotics company, I can answer that. We are all electrical engineers; to build products we have skill sets covered up until and excluding a machinist. I'm hoping that a desktop CNC system, plus hours put into learning how to use it will allow us to prototype what we need, when we need it.
That being said, I was doing some research. Sherline mills looked very cool at first, and the "ultimate machine shop" would just fit in our budget, but I actually found someone that had a Sherline and they expressed less than %100 confidence in it. The Taig systems looked very nice, but it bothered me greatly that the servo retrofits seemed to be grabbing the encoder data off the back of the motor shaft, when the actual motion you are measuring goes through a belt. Why not just buy servo motors with attached gearboxes as needed, and affix an encoder to the shaft, post-gearbox? We've done that before for different applications of motion control and it worked beautifully. With this logic, I set out to find some of the motors we were used to using (TRW and Maxon), but finding a reseller of those things is kind of hard (ours were surplus). I figured this would be a good option should we be able to find the motors, because we have already designed PID controllers for them and they would require minimal redesign. I'm assuming that servo CNC systems use some form of PID, and aside from power and a nice H-bridge, we would need only worry about the interface between the software and the PID microprocessor. Is this correct?
Anyhow, gettign the the real set of questions. I found this place called industrial-hobbies that made a servo kit that mounted the encoder on the ball screw, which sounded like a much better idea. I called the place up, and it seemed like the guy had some practiced.... gospel... to impart on me. I wanted to run some of the relevant things I took away from the phone call by you guys:
-- Desktop mills (such as the Taig), for the most part, are not up to the task of cutting steel.
-- The same class of mill can cut aluminum, but it cannot cut it accurately (the term he used was 'chattering'). This seems odd, because I've seen a lot of seemingly accurate aluminum work in the internet, some of it involving steel.
-- The above two are marginally improved by purchasing a larger mill such as the Sieg-X3.
-- Again, for the same class of mill as the Taig, the performance of a servo CNC system is negligably different from a system that uses steppers. However, he did say that servos over steppers were "nice". This seems to be in conflict with the above statement, and I was wondering if anyone had some quantifiable data that would seperate the performance of the two motion systems.
-- Proper CNC machining is very, very hard.
Apologies for the length of the post. Thanks in advance for any help you can offer.