Just like many other motors, the actual HP may vary depending on setup. I used a 2.5 HP treadmill motor and initially installed it in my mill using an underpowered motor drive that ran on 110. I was not pleased at all with the torque or the speed. I upgraded the driver to the proper size and run it on 220. There is a world of difference. I thought I came close to stalling the motor in the mill, but actually the little V belt was slipping.
I think with the right drive, you can have a very decent motor using a treadmill motor. The motor and driver together was about $150.
If you can, use a drive with adjustable pots on it. This will allow you to tune it the way you need.