Yes cutting with Onyx 6.5 and yes works a treat
You must have contour cutting enabled on your key, else it is not available to you. Check your key details for that, you can have it added if it is not there.
I do loads of print & cut using both onyx 6.5 and 7, the advanatge is that you can get the machine to produce cut solutions otherwise too tricky to try, and also works across all supported printers & cutters.
The real trick is using Illustrator (or your chosen graphics package that works with "spotcolours" and eps) to create a layered eps, with the top layer being the "CutContour" spot colour - so you can overlay any graphic with a cutting template however you like, I have all sorts of ways of generating them using illustrator involving little work - of course letters only need to be "converted to outlines"
The way it works is that you have to have cutting enabled in the postscript translation of the spot colour (in eps options for the job, or automatically through a quickset you have set up specially for cutting), and turn on cutting with your selected cutter in the options for your printer (in onyx) - it will then print with the cutting registration marks etc. and generate a cut file for the cut server for your chosen cutting machine.
You then load the print into your cutter, fire-up cutsever (can be on a different computer), load the cut file and go... you follow the instructions to line up the cutter on the registration marks - and away it goes !
The most difficult thing is creating the eps file in the first place, but it is very powerful and can handle very simple to very complex with no problem, or even runs of repeated "labels" cut to any shape/size. also can mix jobs on the same run to optimize material use.
The only critism I have, is that it is a "sledgehammer to crack a nut" for simple jobs, and you have to know what you are doing with illustrator (or whatever that generates your eps), and onyx.
Hope that helps
John