I am in agreement with Grizzbob. I prefer diamond bits. I have had the same bit for over 4 yeears now and it still cuts as good as the day I bought it. It would have definately cost me more to buy carbide bits for all that time.
As far as telling if the bit is cutting out of round, that should be easy to tell. Pull the brushes out of the motor after you break it in and check the com. You will see odd wear patterns on the com if it is out of round!