Just wanted to weigh in on this, since I asked the same questions a while back. I have 2 lathes (actually 3, but 2 that run...). A small 7x14 chinese clone, and a 16"x6' Hendey.
Had the 7x14 and wanted something bigger. Got the Hendey CHEAP, and that helped. But moving a 6,000 lb machine is an adventure! Been using the Hendey for about a year now.
I need to preface this by saying I haven't built a model engine yet, but have worked on lots of small parts and fixes. For truely tiny stuff, i still use the small lathe, but as size increases, the Hendey is much more fun to use. For roughing work, it takes MUCH bigger bites - things that would take forever on the little lathe can be done in a few passes - no chatter.
The Hendey is the old style lathe with speeds from 16 rpm - about 900 - power feed and crossfeed. Also nice to have the big lathe features - like the emergency brake.
Everything is bigger and heavier - chucks weigh 30 pounds or more,, and tooling is bigger and more expensive. I also have a big shop so the footprint wasn't a problem, but if you have limited room, a big lathe takes up big room. Mine is also 3 phase, so needed space for the 10 horse rotary converter.