if you think the motor is to heavy for the Z-column you could always use a counterweight for compensating the motor's weight just make sure the counter isn't just hanging around supended in the air but has some kind of up and down guide
most can probably mill steel its just how fast that seperates them for engraving if your spindle has enough RPM's for your need it should be engraving just fine again how fast ......
wow, i was looking to upgrade the 1/10th to 1/5 hp dayton and I though that was a huge step. Bravo for the cajones to put that sucker on a max- what is the rpm range? accuracy requirements?