[CAMmando]

Usually a tapered tool holder with some form of retention knob is used. The spindle needs to have a mechanism for "drawing" the tool holder into the spindle. Often this is a finger or collet that springs open and is mechanically drawn closed as tension is applied. Usually an air blast is blown thru the spindle to clear any debris.

Ive been toying with the idea myself (although first thinks first - get a bachine built). Im thinking that for a limited number of tools, the most echonomical arrangement would be to have a fixed "bank" of tools on the machine and have the mahine go "pick up" the tool.