I posted this message in a group I belong to. I am reposting here for anyone who is interested.
I have done quite a bit of work for Dremel and was there demo/make 'n take artist at CHA. I can tell you a little bit about their rotary tools. On the right side of my blog, you can find what my favorites (what I actually use) are in the Dremel line: http://alteredbelly.blogspot.com/
Dremel has corded and uncorded rotary tools.
If you want to go cordless, then I would go with the 10.8V. It is a bit bulky but it does the job and it is the one that I use:http://www.dremel.com/en-us/Tools/Pages/ToolDetail.aspx?pid=10.8V+Lithium-ion+Cordless
Corded - if you are just starting out and not sure if you are going to be using one all the time, I would go with the 300: http://www.dremel.com/en-us/Tools/Pages/ToolDetail.aspx?pid=300+Series
You don't want to go lower than a 300 because you want that variable speed. You need that variable speed because you different speeds depending upon what material you are working on, what you are doing, and thickness of the material.
If you are serious about the tool or want to make a one-time investment, I would go with the 400 or the new 4000 series. It has more power and versatility than the 300. The 400 was just replaced with the 4000 but some stores might still carry the 400 stock.http://www.dremel.com/en-us/Tools/Pages/ToolDetail.aspx?pid=4000
I have the 4000 and love it!
If you are going to be drilling a lot of holes and do a lot of things like charms, pendants, etc. then a workstation might be a good idea if you have a Dremel. I have several Dremel tools and I have one permanently mounted to the workstation. I use it to drill holes into dominoes, tiles, wood pieces, etc. and just swap out drill bits.http://www.dremel.com/en-au/AttachmentsAndAccessories/Pages/AttachmentsDetail.aspx?pid=220-01
I also recommend that you get the drill bit set - it is not included in any of the rotary tool sets that come with the tools:http://www.dremel.com/en-au/AttachmentsAndAccessories/Pages/CategoryProducts.aspx?catid=29&catname=Drill+Bits
Drill bits are always sold separately.
Also important is the universal chuck - otherwise you will have to change out collets depending on what accessory you are putting on the Dremel tool. The size of the each accessory shaft is different. Most people who use the tool in industrial applications don't care that they have to change collets but I find it to be a pain to match them. If you have the wrong size collet, your drill bit or cutting tool will slide out of the Dremel tool. It will not tighten enough. The Universal chuck takes care of that problem. It is a bit bulky but that does not bother me.http://www.dremel.com/en-au/AttachmentsAndAccessories/Pages/AttachmentsDetail.aspx?pid=4486
If you are going to use your Dremel to cut things (like wood pieces) then you might want to get this:http://www.dremel.com/en-au/AttachmentsAndAccessories/Pages/AttachmentsDetail.aspx?pid=EZ406
The EZ lock cutoff wheels are much better than the regular cutoff wheels. I use them all the time to cut wood yard stick pieces and small wood planks.