We recommend the following machines for the fablab/prototyping center in this order of priority :

a) CNC router aka Substractive prototyping machine

b) 3D printer

c) CNC lathe

d) CNC Laser cutting machine ( for non-metals )

e) PCB prototyping machine

f) CNC plasma cutting machine ( for metals )

g) CNC milling machine.( heavy duty precision machining of metals )

More details available here: http://en.wikipedia.org/wiki/Fab_lab

a) CNC router aka Substractive prototyping machine : Can machine a wide range of materials ( ranging from foam, wood (plywood, MDF, balsa wood etc.), plastics ( nylon, ABS< acrylic, polycarbonate etc.), Composites ( carbon fiber, hylam, bakelite, FRP , PCB etc. ),
Non-ferrous metals ( aluminium, copper, graphite etc. ), vinyl sticker, metal engraving, PCB prototyping etc.

CNC router can easily be built for machining large size materials ( 2’x2′ upto 10′ x 5′ size are common )

Machining speeds are very good with softer materials.

Suitable for machining low cost prototyping materials like plywood, MDF, Hylam etc.

Popular brands: ShopBot, Rolanddga, Shapeoko, multiCNC.in

b) 3D printer:

An easy & fast alternate to platic injection moulding .

Can make very complex parts with a button click.

c) CNC Lathe : For cylindrical components ( shafts, screws etc. ) 

d) CNC Laser cutting machine :

Non-contact & precise cutting of soft materials like acrylic, wood etc. ( limited thickness ).

No clamping of tool and raw material required. Hence easy for even kids & artists to operate machine.

One disadvantage in laser is : Acrylic is the best material for laser cutting, but it is very expensive compared to low cost raw materials like plywood, MDF, Hylam etc.(5X cost)

e) PCB prototyping machine : Basic PCB prototyping can be done in a router machine itself, PRO model recommended for higher accuracy.

High end dedicated PCB prototyping machines with options like 60 KRPM spindle, Auto Tool Changer (ATC), Vacuum table, 

Camera for registraction etc. also available. ( http://multicnc.in/data/documents/CNC_PCB_mcBrochure_SVP.pdf )

f) CNC plasma cutting: Non-contact fast metal cutting for fabrication purpose.
Finish: coarse : +-1mm accuracy.

g) CNC milling machine: For precision finished component in metals.

Finish: Fine: +- 0.1mm accuracy.

As you can see from the above list: CNC router is the most versatile machine : capable of machining a wide variety of materials, 
wide range of size & at higher speeds : and hence recommended as the first machine for your fablab.

Other machines like 3D printer, laser cutter etc. have material , size & speed limitations, but have their own advantages.

Please refer to these links for more details: 

http://www.rolanddga.com/solutions/rapidPrototyping/whitepaper/

http://en.wikipedia.org/wiki/Rapid_prototyping

Additive vs Substractive Prototyping

LASER cutting machines in the power range 40Watts to 100 Watts can cut soft materials like balsa wood, acrylic, craft paper etc. and available in price range to 2 Lakhs – 15 Lakhs.

LASER cutting machines that can cut metals neeed power range of 500 Watts to 3 KW and can cost in the range of 75 Lakhs-few crores ( make: AMADA, TRUMPF etc

Advantage of cnc router cutter over laser cutter:

1) low maintenance cost . ( laser tube may need to be replaced every 12 months & replacement is very costly)

2) low operating cost: laser mc will consume few kw power & need accessories like waterpump, compressor, exhaust etc. To run & will need periodic cleaning of mirrors & lenses. Cnc router will need only 600w and low maintenance. 
3) laser cannot cut higher thickness balsa and other hard materials. Cnc router can cut plywood upto 2″ thickness! 
4) laser can cut only soft materials like balsa & acrylic ( limited thickness)with cnc router, you can cut a wide variety of materials ( plywood, mdf, glass epoxy, non-ferrous metals etc. )
5) laser mc cost increases with table size exponentially. Cnc router mc can be built for any table sie with marginal cost increase. 

Advantage of laser cutter over cnc router:

1) advantages of laser machine are: non-contact cutting ( so no/minimal clamping required). ~0. 2mm beam thickness ==> more efficient use of balsa sheets. ( more parts per sheet ). 

CNC ROUTER VS CNC MILL MACHINE

So CNC Milling machine is suitable for producing finished metal parts for precision assembly like automobile components, Machine tool components etc.  
CNC router machine is more suitable for quickly fabricating parts for proof-of-concept , prototyping, fixture making etc.

CNC Milling is more intuitive to learn compared to CNC Lathe. The configuration used in CNC Milling is used in several other machining processes like Laser Cutting, Plasma Cutting, Water Jet Cutting, Wire EDM, etc.

In cnc milling :  we get a line when we give a line gcode (G01), we get a circle when we give a circle gcode (G02) etc.. Whereas in CNC Lathe we get a cylindrical groove for a straight line,  we get a cone when we give an inclined line or a hemi-sphere when we give an arc gcode. Therefore , in CNC Lathe one has to use lot of imagination to understand the output geometry. 

Also concepts like Tool Offset are much easier to understand in CNC milling compared to CNC Lathe. 

So it is better to start with CNC Milling if you want to learn CNC Machining.

Traditionally in ITIs, Polytechnics etc. CNC Lathe is being taught first and then the CNC milling. 

We are not sure about the reason for this !

One reason may be that : CNC lathe is 2-axis CNC control and hence machine is more economical compared to CNC milling machine ( 3-axis control ).

But certainly in the latest world of Digital manufacturing technology: it is better to Learn/Teach CNC Milling concepts to students first before teaching CNC Lathe

Light weight : Coroplast/FluteBoard, Foam board, cardboard box paper, Thermocol , PU foam etc.
 
Wood – Plywood, Balsa wood, MDF , OST ( One Side Teak), pine wood etc. 
Esy availability in local plywood shops at low cost. 
 
Plastics – Acrylic, Polycarbonate, Nylon, PP,  ABS
 
Composite – Hylam, FRP, Carbon Fiber, Bakelite, PCB substrate etc. 
 
Non-ferrous – Aluminium, Copper, Brass.
 
Benefits of hylam: 
 
Hylam Sheet also known as Phenolic Laminated Sheets, Bakelite Sheet
 
This is a very good prototyping material, ( with easy machinability property like plywood and 
good strength ( ~ 25% ) of aluminium ). 
This comes with a laminated finish. So no need to apply varnish or paint. 
Also it does NOT absorb moisture, so mould/fungus formation, weakening with moisture etc. doesnt happen unlike plywood. 
 
HYLAM is a strong resin based composite material used mainly in Electrical insulation applications. 
All switches in buildings, machineries are mounted on this insulation material. 
Most railway coach interiors also has this material as the wall or below the seats etc. 
Hence it is a commonly available material. ( still relatively difficult to find compared to plywood, but worth locating a local supplier for it ).
 
Our advise: Any new product/project u r developing, build it in hylam before building in metal .