R8. Might get a set of R8 spindle collets at some point but given that I've already gotten all of the metric ER40 collets there are, it might be a while before investing in to a new set, but we'll see. Maybe if I just buy one at a time and see if that makes a noticeable difference. Also there is the fact that if I get a knee mill at some point, all the ones sold in Finland have an ISO spindle so those would not be compatible with it anyway and having two mills in the garage would not be possible.
But I will see where I can get with this machine and try to learn things as I go. Maybe I won't need a knee mill, maybe I will but until then I will try to learn as much as I can.
You're unlikely to requiere a larger machine any time soon if you've got a square column mill drill. You just have to moderate your expectations. Like someone said, a 16 mm end mill on steel is already pushing it, even on a large knee mill. Steel is quite though, so it takes a lot of force and energy to remove even a little of it accurately.
I've got two mill-drills myself. One similar to yours, with box head and gear drive (around 260 Kg), and a sightly smaller one with belt drive (around 200 Kg). Both run on round / pipe columns. So while not identical to yours, I know what to expect from a machine of that kind. And I assure you, they are not toys.
You just need to understand how NOT to undermine the (already scarce) machine rigidity. Like I said, one way to is keep tool stick-out to the absolutely minimum. As any experienced machinist around here will tell you, a stub length drill is far more accurate than a jobber length. And that's just drilling, where no side forces are supposed to be involved. With milling tool stick-out is a big issue. The closer the distance from the tip of the cutter to the machine head, the better results you'll have. So by all means, buy an R8 collet, even if it's just the 16mm one. You can even try to cut the shank of the mill a little.
Also, machines have a lot of sliding parts that need to be adjusted, or even locked, to work without chatter. Check the table gibs, check the gibs on the head, check the fit of the quill with head. Basically, check everything for a snug fit. And get into the habit of locking everything not absolutely needed.
I bolted my larger mill drill to the floor with anchors. Made a custom welded table with pipe as legs, so threaded rod can pass trough the legs. It improved things a lot.
Finally, the quality of the end mills is important. The Chinese sell a lot of tools made of low grade stuff that, while strictly speaking is HSS, it's very basic compared to, say, M2. It's only good for soft metals as it dulls quickly on steel. Nothing worse than trying to mill with a dull cutter.