I have a 2-axis TPACtools.com DRO on my Grizzly G0709 14" x 40". Mine has 5 micron glass scales which gives a resolution of about +/- 0.0002". Cost me $375 delivered. Comes with a low-profile scale for the cross feed. Here's the thread of my install:
http://hobby-machinist.com/threads/grizzly-g0709-lathe-dro-install.49902/
Jim Dawson did an awesome job on his lathe DRO install with magnetic scales. Here's the thread to Jim's install:
http://hobby-machinist.com/threads/lathe-dro.58063/
DROPros has a nice description of both technologies. Here's that link:
http://www.dropros.com/DRO_PROS_Digital_Readout_Magnetic_Scale.htm
I have glass scales on my mill and lathe. Only issue I've had was temperature related last winter when my mill DRO stopped working at a shop temp of about 10 or 20 F. My lathe DRO still worked fine. Temp operating range is supposed to be something like 32 F - 120 F. I brought the box inside to warm it up, reinstalled it and it worked fine. Now put a heating pad on it through the winter; cheaper to heat the DRO than my whole shop. My issue was with the display, not the scales so I can vouch for glass scales still working at 10 F.
Bruce