Two things.
First, any time you push a machine close to its dimensional limits (such as the lathe you are asking about), you are likely to get chatter and poor finish because the stiffness and rigidity just aren't there. What also contributes a lot is the fact that you may have to hang the tool bit out on a long extension to get the cut you want. Under these conditions, any interrupted cuts you may need to do just makes things a lot worse. In machine tools, stiffness and rigidity play a very large part. Also, cast iron has very good self lubrication and damping properties. There is no real substitute for mass in the right places.
I'm prejudiced, but while they are not a really heavy machine as machine tools go, South Bend lathes are a very good example of putting material in the right place to serve this purpose.
Second, if you have a dial indicator that reads in thousandths or finer and that has a magnetic base, put it on the vise of your mill with the dial indicator resting on the column. Grab hold of the vise and try to move it front & back and left and right. Put the indicator on the front and also the side of the column in separate tests. In either case, if the indicator needle moves at all, you have slop in the ways or screw mountings and this needs to be removed for best accuracy.
I also made a rotary headstock for the little mill and I've found it to be a very useful addition to the mill's capabilities. You can see it in use in the thread on the couplers and in making the power reverse parts. Since the lathe I have is a 13" South Bend with 2C collets, I made the headstock to fit them. I find collets to be very useful for fast and repetitive work and their accuracy is good enough for most things.
Hope this helps a bit.
Richard Trounce.
