Joe,
I just got the MFK700 the other day after reading the posts on this site as well as other reviews. Haven't had a chance to work with it yet, but its been stated in other posts that it will trim up to 5/8" hardwood edging. I bought the straight cutting bit #491666 to use in the horizontal mode. It seems in the horizontal, the bit size is very important. In the vertical mode, I checked the 1/4" bits I have in stock, and found no problems as of yet. I may have to be careful when purchasing a straight cutter for dadoing cabinets backs for 1/4" ply since many of the spiral bits seem to have long shanks. I haven't measured it with a caliper yet, but it seems there is about 5/8"+ of vertical travel. Hopefully I will get a chance to "play" this weekend and will report my findings.
From what I read, the 1.5 deg tilt is not noticable and will avoid tearing out your veneer.
The basic ($400) package only comes with the vertical base and no horizontal base. When purchased separately, the horizontal base is $150 and I believe you will have to purchase the dust hood and other accessories separately, which is additional. IMO, I would go for the full set if you intend to do edge banding. I too considered the "basic" option as well, but opted for the set.