I've only used an oscillating tool a few times (it was someone else's ... can't remember the maker, but I don't think it was Fein), and I do own a rotary cutter (RotoZip), and a few Dremel rotary tools, but they're smaller models for hobby work, not construction. The RotoZip is closer in spec to the Dremel Tri Multi-Tool from what I can find (it's on their website as the 'Dremel Trio', not filed under 'rotary tools', which tend to be more for finer / hobby type work, rather than construction). My take on them:
- A rotary tool will have to remove more material, as the bits are at least 1/8" thick. This means that they'll generate more dust in the process.
- The oscilating tools need space on the side to work. They're best when coming in from the edge, rather than being plunged in to make a cut. They have a sort of almost circular blade for plunging in, but it's only really useful if you're going to be making a cut that's at least as wide as the blade (3-4", depending on the one)
- The nature of the oscilating tool means that it's going to hold a straight line better than a rotary tool. This might be good or bad, depending on what type of cut you're trying to make.
- Because of how the blade mounts to an oscillating tool, it can cut very close to an obstruction ... so you can use 'em for trimming a door jamb so you can slide tile or other flooring under it. You can't do this easily with a rotary tool.
- If for some reason you need to only cut down to a specific depth, you can adjust the cutting bit of the RotoZip within reason, and if if other rotary tools couldn't do it, you'd be able to use something to set the proper gap. I don't think it would be possible (or at least not easily) to do the same thing with the oscillating tool ... you really don't want to bring the head all the way down to the surface of what you're cutting.
- The rotary cutters work great for cutting large circles in drywall, or in cement backer board when laying tile. For the actual tile cutting, if I can, I prefer a wet saw, but the rotary tools work fine for punching a hole in the middle of large tiles, to get around the pipes for a radiator or the showerhead if it's not right at the edge. (more common if you're using 12' tiles). I have no idea if oscillating tools are rated for tile cutting, and even if they are, they're going to have problems with curves or even making small square holes.
- The rotary cutters work pretty well for cutting holes for work boxes ... but for drywall, a drywall saw works almost as clean and fast, and doesn't need to be plugged in. For putting new work boxes in plaster, on the other hand, they're great (just make sure you know which bits to use ... I killed a drywall bit cutting one the hole for one box). An oscillating tool might be able to do it; it could get the longer edge, but it might not be able to do the shorter sides cleanly.
- The nature of the rotary cutters mean they work pretty well for enlarging holes that were cut too small. You won't get as clean of an edge as if you had used the proper sized hole-saw bit, but if you're dealing with large sheet goods, it's often easier than trying to conort yourself while holding a scroll saw. (especially so if you're cutting something that's already installed).
If I guessed wrong on which Dremel you were looking at ... the smaller Dremel rotary tools have lots of uses, which is why I have more than one, but they tend to be more for hobby stuff, or prep work (like cleaning battery terminals) than construction-type tasks.