HSS with or without cobalt will be fine, The solid carbide are really only of use on difficult materials like chilled cast iron, they are also easily damaged, just drop one and you could chip it.
Your ER collet will work fine holding screwed, plain of the FC-3 disposables with the flat on the shank.
The disposable FC-3 type work out quite economic but being a bit shorter can give clearance problems when you need to mill close to hold down bolts as the chuck can hit the bolts.
You would be better off buying the cutters as you need them and get ones of a reasonable quality, some of the sets can be a bit rough.
Have a read of
this recent thread as it covers some of what you are asking
Jason
Edited By JasonB on 02/12/2009 07:29:39