Well D2S, what did you end up doing? Did you get the Melco?
A friend of mine had a Melco, single head machine. Looked like a small domestic machine, but made much sturdier. He could only embroider a single color at a time and had to switch out thread to change color. It worked good for small work, but one day gave up the ghost. It was quite old, but I have to say, it did work well for them for years. I'm doing all their embroidery for them now.
I looked up the EMC10 Melco that you are talking about, looks like 1 head, 10/needle. This one looks like it has many more features on it than the Melco my friend had that went caput. If it runs good and you are comfortable using it, then I'd say buy it! However, not sure I'd pay that price for it myself. I'd probably go closer to $1,000 on it, assuming it runs very well.
I bought a used machine once, for about $1800.00. I put about another $1,000.00 into it, did much of the parts replacement and repairs myself, then had a technician come in to fine tune it. By the time I was done, I ended up with a machine worth about triple what I paid for it, and it's not leased! Yay! Still own it, it was a fantastic investment. It has paid for itself many times over. It's a "Brother" machine, a good name, and the features on it matched pretty closely to the SWF machines I'd purchased new. It was a few years older, but required same kind of files and such, which are TAJIMA based.
About what Evan said, I agree with all of that. My experience (and purchases) on machines have been with the Brother and SWF. SWF machines were purchased new. Software, I use a program called "Generations" which was quite reasonable in price.