Thanks a lot ben this is very useful info. I have seen somewhere ppl using the z axis to control there laser. Are you aware of any engraving software that generate z axis G code for laser.
Also Just a bit confused though with you spindle laser setup so i am assuming it was a marking laser(visual zeroing) or was it a actually a laser engraving setup. If you use Z -.001 as OFF and Z.001 as ON. to control the laser how did you control the z axis then??

The laser is a 1 watt IR and focusable. It will burn wood up to 1.25" inches away, not enough power for metal. I use it to
mainly burn graphics in wood. I set the height by hand at .750", focus it and set Z axis to 0. Dark wood burns easly but light
wood like birch needs some carbon rubbed on it. I do my graphics in Inkscape with line width set to .003" and save as DXF
file type. In Cambam I have a style for the laser setting the clearence at .001", cut depth at -.001" and feed at 4"/min. With
only .002" up and down motion the laser goes on and off and stays in focus. Cambam makes the gcode file. Ben

Its done!!!!!!!!  
got it working. I was able to engrave at 5 IPM. I am using Inkscape plugin called "J tech photonics laser tool" which is a vector engraving plugin. which allow you to create a M3 & M5 command.