> Lastly, Ive heard it mentioned that the bits can cost $40!!! Why so much
> for these little babies??? Carbide or diamond???

Forget about diamond tipped bits. They are VERY expensive and totally unecessary. I make carbide and diamond tipped cutting tools for a living. For soft woods like cedar, carbide bits are nice and will probably last a lifetime, but steel bits are fine also if you don't want to pay too much and if all you will use them for is kayak building. -Fred