Jazz, I am swaying towards step/dir, but was just wondering what other's views on the options are.


Neale, in short, yes, there is tuning in any kind of closed loop. It might not be PID, but closed loops need some form of tuning, otherwise they likely won't perform satisfactorily.
Although many servo drives will have some form of automatic tuning, they can often be improved with manual tuning. I'd suspect lots of users at the DIY retrofit end of the spectrum, probably just run the drives with the default tuning, and have no idea how accurate the commanded position really is.

If I go with the step/dir option, I'll still be at least running the encoder feedback to the controller for tuning purposes, but at a later date, I may opt to add linear scales to axes, to have a dual closed loop system, with the servo drives simply running step/dir, and the linear scales providing an outer closed loop via the controller.