Well, I'm all out of short answers, but here's a long answer:
I wrote up a blog post on this a few years ago. One of these days I'll write an updated version, but you might find it useful.
I've not really used a Dremmel so can't comment on its usefulness in pipe making. In general, professional pipe makers use stationary tools (lathes, belt sanders, disk sanders, bandsaws, etc.), so the tool sits still while the pipe moves around. But if you don't have that kind of tooling (most of us don't), then you can indeed use hand tools to shape a pipe.
I do find it quicker to saw away most of the waste, and then follow up with rasps, files, and sandpaper. A good coping saw is really all you need. Using the tools isn't necessarily the hard part, though. The hardest part for me was figuring out how to hold the block steady so I could work on it with both hands. (Holding the block in one hand and cutting at it with the other hand is NOT a good idea.) If I didn't have the system I came up with, I'd probably use a small machinist's vise fitted with wooden jaws and further padded with a rag or two.
Best of luck to you, and enjoy the process!
