I think it's well worth using the flywheel and matching poly-V pulley that came off the treadmill. The motor pulley diameter on mine is about an inch, which is at least 1/2 the size of the V-pulley I had on there before, plus the countershaft pulley is larger, so the motor is geared down a lot more. I couldn't go any smaller with the V-pulley and even then I was having slippage issues. Mine will bog down at less than 1/4 motor speed (~1000rpm at the motor), but with the new pulleys and back gears I can get down to ~25rpm for turning and less than 10rpm for tapping.
Beware though, some of those treadmill motors+flywheels may not be very well balanced - I'm going to pull mine off and balance it this week as the flywheel is well out of round.