Advanced rotor systems, for such applications as high-speed flywheel systems, consist (in a basic fashion) of a lightweight rotor spinning at relatively high speeds and supported by magnetic bearings. Composite materials are an extremely attractive choice for such rotor designs, offering high strength with light-weight. However, there are a number of issues that must be addressed for such efforts to be successful. Specific issues include imbalance control and active techniques to suppress internal damping-induced instability. A detailed description of the problem being considered and a strategy for solving it are presented. Simulation modeling and analysis results are presented and discussed to illustrate the method and demonstrate its effectiveness.