Interesting idea and a good price for that vice if memory serves. I can't help feeling that while I think this will work it's going to be a lot of hassle to set up for the benefit it brings unless you are intending to make a run of identical components. For the joint to be any good you'll need to get the wood bang on parallel with the cutter (in the vertical direction) which will be difficult without a fence which would have to stick down though the table.

I think I'd invest my time in buying a Festool Domino (amazing bit of kit) and if I wanted dovetails a dovetailing jig.