very nice indeed. what size bearings did you use?

How have you pre-loaded the bearings? For machining metal you would ideally have a decent amount of fixed pre-load but for high speed they are normally spring preloaded. Having said that most of the spindles on ebay etc are spring preloaded and I believe people use them milling metal ok, as with all design its a case of compromise you have to decide how fast you want to cut metal as in reality you will just have to take slower and shallower cuts. This is the same problem I came up against when I was looking at a spindle capable of milling meatal and routing wood. I have put mine on hold as I have decided to go down the adjustable hydraulic pre-load and air/oil lubrication route, which means a lot more work and probably a few trial runs.

With all steel construction how are you going to deal with the heat dissipation at high speed? would a finned Ali housing for the motor be better? or are you using the top as the mount to the machine?

Look forward seeing how you get on with this.