Well I'll tried to have you sort a few things out, then you can decide if you want a whole spanking new set-up (those new toys sorta call your name don't they?). First a few questions to ask.
1) Did you ever try to charge a similar voltage battery in your Dremel charger? (It'll pretty much permenantly confuse it and you'll need a new charger).
2. Have you hooked the charger to a different wall sockets in your house/apartment. If the red light isn't coming on when the battery is added to the unit regardless of where charger is plugged in - put one mark in the column for a bad charger.
3. If you want to rule out problems with your electrical system/sockets, enlist the aid of a friend who will let you plug in your charger and battery. Assure him that its completely safe, and you can rule out electrical problems with your home.
4. Where do you store these batteries when not in use and not in the charger? First, if you store the batteries in your tool box the terminal can be damaged by other metal objects (nails, screws, keys, etc) and prevent them from working in the charger.
5. How often and for how long, do you leave the battery in the charger (before this little problem. I mean). Your problem could be that your battery is simply dead. Now I understand that you may have only charged it 10 times and maybe the specs say the battery is good for 100 charges. You need to know that all charges are not equal. The manufacturer writes specs in terms of the way the battery is designed to perform when used according to the results of their research. The battery is meant to be used till its energy is nearly depleted, THEN and ONLY THEN, is it to be recharged. THAT FULL recharging is counted as #1. Many of us who buy the tool, use it for a 15 minute job & recharge it, of course, leaving the battery in the charger so it'll be ready the next time we need it-maybe in 2 or 3 weeks. Well, unfortunately the battery doesn't pick-up any significant additional charge. On the contrary, it kind of weakens the battery's resolve to hold on to the correct amount of charge, once in a position to discarge its energy, the battery is even MORE eager to discharge the minimum portion programmed in, to require you to shorten its life by recharging once again.
It seems odd that the better Tech companies get at making these things, the let trust we have in the inventions, to the point where we're only getting about 1/3 of the design use from ALL rechargable batteries. (This figure comes from the Cell Phone industry). With your cordless, the battery has a spec for hours of use on a full 3 hour charge. If not used for that long, don't recharge, that removes one of its "lives", simply put it in a Travel Container (like for soap) and put it in your tool box till its nex use.
Now, since you don't give information regarding how you were handling charging the unit before this problem started, don't totally rule it out. If the battery is dead, the charger won't accept it to charge, and could behave like your seeing. You could buy another battery and see if it charges on the charger - Just keep track of the charges.
However, it still could be the charger, that could only be fixed by replacing. Since the battery is the WildCard, there's no way of knowing if there's a problem with the Charger.
This is one of the situations where it would be nice if you had a friend with the same set up.....
As far as Going with something brand new - everybodys dream. For that, I suggest you contact Customer Service, by phone or E-mail. They know everything about the products and will get into the type of projects you do, the materials you like to use, how elaborate a set up you want, and the pros and cons of cordless vs corded. I just bought my 2nd 400XPR (corded) because I loved the FlexShaft feature, the MultiSaw, and the Router - I've accumulated 78 assessories in the 5 years and I wouldn't trade it for anything. Try entering the following into your browser's address bar, it'll take to the page where the product manual are. On the right side of the screen, if you click on "Dremel Product Catalog" (the PDF Download) it will show you the catalog of all the different models, on the same page you can click on "Dremel Accessory Guide Poster" (the PDF Download) is a poster of all the accessories available - I recommend printing this, it comes in handy. Here's the address http://www.dremel.com/en-us/customerservice/ManualsAndLiteratures/Pages/default.aspx
Good Luck - Sorry this is so long!