You want to rout out a pocket. I agree with Stick, a small trim router with plunge capability (that's a must have in this case) like the Bosch Colt or DeWalt 611. A jig with a hole the size of the pocket and that mortising bit would be easy. You'd need a different jig for each offset in the pocket. Another option might be using guide bushings but you are limited to jumps or either 1/16" or 1/8". There is no real fine tuning using guide bushings. If you want an idea of how they work you can go to our home page by clicking on the large Routerforums logo at the top of the page and look for the tutorials on them by Harrysin (Sinclair).
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