Use fiberglass-reinforced cutoff wheels, I've never had one shatter:
http://www.amazon.com/Dremel-426-Fib.../dp/B00004UDH9
I've typically use them until they've worn down to about 1/2" in diameter before discarding 'em.
I've never had good results attempting to square off housing ends using any type of Dremel bit. However I DO use the sides of the cheap cutoff discs to square and bevel the edges of cable ends so they initially slide through the housing without catching the liner. To square housing ends I use a table-mounted belt sander with a medium grit (100?) belt. A light touch and quick dips in water keep the liner from frying.