Looks to be a bit on the slow side - you'd need plenty of patience. Also, without any air-assist I would expect the smoke would soon foul the optics. I would suggest putting the money towards a K40 and an upgrade or two.

Here's a great choice for a DIY effort, but the engineering is completed:  http://openbuilds.org/builds/openbuilds-freeburn-1-v-slot-co2-laser-60-100w.1001/

If you want to spend a little more, I bought one of these a couple of months ago - http://www.ebay.com/itm/111215845517 - a 40W laser cutter. Despite what some older reviews say, the CoreDraw software is entirely usable and the construction is very good (much better than it use to be given what I've read).

At 1600mW, probably paper.  It's really an etcher at that power.  There's not enough power to cut through layers of plywood.  Soft balsa wood might be doable with multiple passes.

Yeah, I also like the ability of those machines to be fed larger sheets of material or to sit on the material. I think sheet feeding is also an option on the glowforge machines, which do very neat registration of the piece you're cutting with cameras, but they're a proper grown-up CO2 cutter. 

I was looking at using CoreXY to drive my machine, as it lets you keep the motors stationary, reducing the moving mass a little.

Yes, I've seen them listed up to 5W; at that price they're almost the same as the 20W CO2 ones, which seems a bit pointless to buy - though I guess the cheapest CO2 ones have their own issues.

The open framework of the diode-based cutters looks nice though - looks like you could plonk it down on a full sheet of ply, rather than having to cut sheets down to fit the working area.

I'd also be very curious to hear how they perform. Some of those ads have videos of paper being cut and you can find listings for solid state engravers/cutters listed at up to 5w, although like you say, I imagine they're being overstated. I would treat them as essentially being engravers, unless you want paper & card cut.

What I find interesting is that the solid state lasers do keep getting more powerful. I'm hoping there'll come a point where they're viable for light cutting duties. 

I've been toying with the idea of building a cutter/engraver built around the same laser modules, not because I think I can beat aliexpress on price, but because its an interesting challenge to design one. If I were to design one, I think adding an enclosure would be pretyt high up the list!