A. Michael Dresdner: "Some bits don't come in 1/2" shank format, and some buyers already have many 1/4" shank bits from other router purchases. Simply put, the 1/4" collet allows you versatility. Think about a flush cutting bit or "pattern" bit with the bearing on the shank above the cutter. It has a bearing pressed over the shank, and its outside race is the size of the cutter."

A. Ellis Walentine: "Many routers come with two collets so they can accommodate the two most popular bit shank diameters, 1/4" and 1/2". The shank diameter is based loosely on the size and weight of the bit. Heavier and larger-diameter bits have 1/2" shanks, to protect them against bending or breaking during heavy routing. Some small to medium bit sizes and profiles are available with either size shank. Generally, you will get less vibration with the 1/2" shanks, but 1/4" is available so you can run these bits in smaller routers that may have only 1/4" collet capacity."

A. Lee Grindinger: "You're right, the larger diameter is stronger and generally results in less chatter due to it's increased rigidity. However, there are times a 1/4" shank is more practical. Most dovetail jigs use template guides and these guides are sized so only the 1/4" shank will fit through the hole. Smaller bits, like 1/8" straight bits are sometimes offered only in 1/4" shanks. So, keep the small collet but do buy the 1/2" bits when possible or practical."