[RotarySMP]

Good advice from Dave.

Please don't take this the wrong way, but...
You question is pretty meaningless, as it implies a lack of experience.

The best small lathe that money can buy is probably something like a Hardinge as you can't substitute for mass and rigidity, but if you are cutting long thin parts in drill rod, you will still get flex in the part of more than 0.0005", unless you start adding your skill and experience. At that stage it is the skill of the operator rather than the quality of the machine which determines the quality of the end product.

If you take the time to do all the mods and improvments to a chinese lathe, you will probably end up wih a more capable machine than the Proxxon, as it will be more massive. You will then have more experience to determine your needs and ablities.

When considering cost, the basic price of the lathe will be dwarfed by the cost of tooling.