Well, at first I wasnt too impressed with my little lathe, It was mainly because I didnt know the tricks of the trade
Now Im actually pretty impressed with what it can do. I can take .06" off the diameter in 1" diameter steel and even stainless steel at about 300-500rpm with carbide and a little coolant.
At first I thought I should run it rather fast and turning tools with larger radious(.06 or so) but over time and messing with stuff at work, I saw that smaller radious makes a nicer finish and the larger radious really doesnt help all that much as far as I saw.
I now use carbide indexable tooling, the cheap stuff of course

but it does its job rather well, its just the insert hold down screws that bother me on these, strip the head out easily.
I can throw off quite the chips, make them break into small peices without any problems.
Any more than .06 off the diameter will stall the motor after about half inch, I started taking .08 off the diameter and it stalled.
I am sure that a larger lathe could do much more than this little one, but you would be amased what you can do if its used mostly properly
Jon