Wow, .01"! If that's what you guys have to do then no wonder I'm having trouble. I have literally seen my machine cut .2" when the bit slipped in once, and it wasn't having trouble in the least. I have encoders, so I am certain it was actually OK in X and Y. Now as far as whether this is good for the machine I am not sure. But cut at that depth it did. Mind you it was at .2"/min.
I'll try the 100 cuts per inch tonight. I am just amazed that you can't "bite" more than this each pass. I did upgrade to a beefy 1/2hp spindle motor and I have the more powerful steppers (and a nice 48v Gecokdrive). So the only worry would be that I'd wreck the aluminum machine with too much force by trying more depth.
I suppose that it really is an issue of "too much force" and the weak link is the collet.
One thing I've noticed about these cheaper mills (and the maxnc in particular) is the weakness of the collet system. I am starting to wonder if this was done on purpose and/or is a good thing that was done to keep you from destroying the machine. I was pondering on upgrading to an endmill holder but of course if the bit gets pushed beyond the limit, I really wonder if the bit will break first, or if it will be my machine! On a real machine the bit breaks, but on MaxNC machines, who knows.