Phil,
I've never cut concrete with a handibot...so I'm not sure about how well regular router bits will do with the grit and hardness. We did cut something called "polycrete" for a guy a few months ago: [
www.youtube.com]
As far as the set up...the only complication that I can see is keeping your tool level to the paver that you're carving in. If the entire tool can be set on a single paver then I see no problem, but it the tool is resting on multiple pavers that are at slightly different heights it may affect how sharp your engraving looks. You could of course shim the tool up to keep it level.
A good test would be if you can cut the material with a hand router--then you can cut it with a handibot.
Brian