Don't take that to mean a Shopsmith is good for general metalworking, the saw table especially is much too flexible on its skinny little mounting poles and its lift mechanism is fragile.
I do think the horizontal boring machine design of them has potential for a bootstrapped homebrew lathe/mill. I've written up suggestions on making such a machine from welded angle, tubing and pillow blocks here before, with apparently no takers. The basis is the Lincoln miller of ~1850. If you want to build a machine tool with hand tools, the first successful ones have some good ideas to copy.
***This is one of the issues I am grappling with. When I ask myself: "What are you going to use the lathe for?" the first twenty or so answers are "build another lathe".
There are some nice descriptions of home-made lathes on the net. The crucial thing seems to be the headstock: Once you have something that turns a faceplate many good things follow from that and the machine can be extended with the use of this facility (I am being very general here and ignoring such things as ways etc.).
There are quite a few headstocks on sale on eBay. However, it seems somewhat insane to spend $200 on a headstock only when I can have a very decent wood lathe for $569.
I think all those who say it is better to go with the metal lathe and do woodwork on that have a valid point. However, the economics do not favour it: The cost of a useful metal lathe is $1000 give or take a few. I would not mind one of the mini-lathes but they are no cheaper. Those that are cheaper are either "short" (Busy Bee 7x8), or have small motors with limited speed control (House of Tools, 7x12).
The way I thought about it is I could make various round metal plates with more control than I have now, I could make central drilling much easier (although since I made a center-drilling jig for my drill press things are much more civilized) and I could make wooden parts for various contraptions with less effort (and probably more accurately and safely than what I am doing now on the drill press).
OTOH tomorrow I shall go scavenging - if I remember correctly the local scrap yard had bins with bearings, shafts and all kind of other interesting articles. Maybe that is the way to go after all.