As is often times the case, Sheldon provides a concise outline of some good techniques:
http://sheldonbrown.com/cables.html#cutting
I use bicycle cable cutters followed by a short 'kiss' against the bench grinder: it's rather fool proof. Second best would be cutters and a flat file. I've tried the Dremmel and just found the "snip" and "kiss" or a few pulls of the file to be more efficient.