I've got several routers listed as possible options for the Lobo CNC spindle. All have a nominal 2.5" (actually closer to 2.530") diameter body. While they range in power from about 1/4HP to 1 1/4HP, the more important considerations are the type of collet and speed control.
Collets: All the routers have 1/4" diameter collet for common router bits, but the style is different, which can make a big difference in the runout. The cheaper router spindles have a short initial taper followed by a 0.250" straight bore. A relatively tiny tapered split ring clamps the shank in place. This type of collet system can have a pretty large runout of a few thousadths. The better type of collet found on the Makita RT0700 is longer and has 4 slits. This clamps the shank more uniformly, and the runout should be less than 0.001". The Makita RT0700 also includes a 3/8" collet. This collet, however, is of the simple split ring variety and has pretty sloppy runout. For the many applications, a few thousandths of runout is not a big deal, but if you are trying to do fret slots with 0.023" dia bit, it's far from ideal.
You'll also want to get some sort of 1/4" to 1/8" shank collet adapter. Most of these commonly available adapters have a single slit which sometimes doesn't accurately center the bit.
stewmac.com, however, has one with 4 slits which should give less runout.
Speed Control: The thing to be aware of here is that there is a big difference between built-in electronic speed control and those external router speed control boxes. The build-in electronic speed control (like on the Makita) constantly adjusts the amount of power delivered to the motor as your cutting load varies so that the spindle always operates at a constant speed. You can operate down to 10,000 RPM with full torque.
The simple speed control boxes merely set the router voltage, and as the motor has to work harder, the spindle slows down. The result is that if you try lowering the speed to, say, 10,000 RPM, the minute you encounter any cutting load at all, the motor may stop altogether!
All that said, one of the less expensive routers from Grizzly or Harbor Freight can work fine if you are doing light cutting and aren't demanding super high precision. These routers, despite their low price, seem to get pretty good reviews. However, the Makita will give you far more flexibility if you can spring for the extra $$$.