I'm a big fan of Dremel tools; I'll go so far as to suggest that, if you're considering getting into power tools, a rotary tool is the first one to buy. (From my perspective as a ship modeler I'd put it much higher up the list than I'd put an airbrush - though I know lots of modelers will disagree.) I do, however, have one big reservation about Dremel Moto-Tools and virtually all similar rotary tools. They turn too blankety-blankety fast.
I won my first Dremel - a basic, single-speed, sleeve-bearing one - in a contest back in about 1973. The first time I tried to use it on a ship model I wondered what use anybody could find for such a thing. Turning at, if I remember right, 30,000 rpm, it melted plastic instantly and burned wood almost as fast.
So, after studying the little catalog that came in the box, I scraped together the necessary $15.00, went to the local hobby shop (we had several good ones in Columbus, Ohio in those far-off days), and bought a Dremel "Tabletop Speed Control." What a difference! With the tool plugged into the speed control, I could set the knob on the control all the way to the left, turn on the tool, and put the motionless drill bit exactly where I wanted it. Then, holding the tool in one hand, I could turn the knob with the other and work up exactly the speed I wanted. The Dremel quickly became one of the most frequently used tools in my shop. The Tabletop Speed Control came in handy for lots of other purposes, too. Some years later I bought a Unimat lathe/drill press, and found that if I plugged it into the speed control I could change speeds without bothering to shift belts. The speed control is great for regulating the heat of a soldering iron - and changing the size of the picture on a small black-and-white TV set. (Don't ask how I found that out.) I eventually bought an additional speed control. I still have both of them; at age 30+ they work as well as they ever did.
Since then, Dremel has discontinued its single-speed tools and the Tabletop Speed Control. Every couple of years a new version of the Moto-Tool gets introduced, always with great fanfare about how fast and powerful it is. The truth of the matter is that, for purposes of model building, those improvements in "power" are just about irrelevant, and at least 90 percent of the time a tool turning at a small fraction of "Dremel speed" would be more than adequate.
I've bought several other Dremel rotary tools over the years - including a relatively modern, ball-bearing one with a built-in speed control, and a 2-speed, battery-powered "Mighty Mite." The slowest speeds on the latter two are just about slow enough for most model-building jobs. For drilling, they'll work on styrene and wood IF the drill bit is sharp. But when it gets even a little dull, it will start melting plastic or singeing wood.
My current favorite rotary tool is this one: http://www.woodcraft.com/family.aspx?familyid=3736&mode=details#tabs
It's sold by a German company called We-cheer, and it's slightly more bulky than a fat pencil. The very flexible power cord comes out the tail end, so it doesn't get in the way. The tool uses Dremel collets, and has a capacity of 0 to 1/8". Its normal speed is too fast for most purposes, but I keep it plugged into my old reliable Dremel Tabletop Speed Control. The tool cost $25.00. I haven't had it long enough to comment on its longevity, but at that price I can afford to replace it now and then if necessary. Highly recommended - if you have a means of controlling its speed. (I think Dremel still sells a foot-operated speed control. I know Foredom offers several for its flexible shaft machines. I suspect any of the several plug-in speed controllers for routers and other woodworking tools would work perfectly well - though they're not cheap.)
Dremel - if you're really interested in appealing to the hobbyist, give a little more thought to what he/she actually needs. The ideal rotary tool for the model builder would (1) be extremely small and light, (2) run off a small, light, rechargeable battery, (3) have a built-in speed control covering a range from 0 to about 1,000 rpm, and (4) cost less than $50. Market a tool like that, and the modeling community will beat a path to your door.
Later edit: I just took a look at the Dremel website. Apparently the company does still sell a couple of single-speed rotary tools. Both of them turn far too fast for most modeling purposes. One of them is described as "the only Dremel rotary tool for use with the foot-operated speed control." I couldn't find any other reference to the "foot-operated speed control" on the website. Maybe it's been discontinued.
One fascinating new product advertised therein is a bright orange, battery-powered rotary tool sold for the specific purpose of trimming the claws of dogs and cats. A close look reveals that it's just a little Moto-Tool with a sanding drum chucked into it. How my cats Yehudi, Hepzibah, and Willie II would react to having their claws sanded down with that thing....Well, I don't want to think about it.