Thank you for the explanation about backlash - I think I got it!
Sherline makes interesting products, I'm pretty sure lots of people are having fun with them. But the machines seem to be very basic and limited. No compound slide( I may be wrong about that), no power feed, and, main restriction is the size - only 3.5" over the bed and 1.88" over the cross-slide. It doesn't sound serious.
I found couple other topics on this forum with basically the same question as mine:
http://www.hobby-machinist.com/threads/first-lathe-g4000-vs-g0768.30044/
http://www.hobby-machinist.com/threads/grizzly-g0768-8-x-16-lathe.36042/
As I understand, both guys went with the larger lathes - 10x22 or so. Unfortunately, it's not an option in my case - I need something I can lift alone or with the help from friend/wife. 8x16 seems to be the largest liftable size. From other hand, big machines (at least affordable ones) are lacking of speed regulator/ power feed reverse. And, if I understand correctly, larger size not necessary means more rigidity. Say, if we increase the swing over the bed from 8" to 10" (25%), we have to increase the bed/headstock rigidity on 25% as well to get, at least, the same overall rigidity (please correct me if I wrong).
So I'm still choosing between the cheapest 7x14 + lots of extras or more expensive, but nice-looking 8x16. I feel like it's time to stop thinking and start doing. Should I toss up a coin?
Tomorrow, hopefully, I will try to make couple cuts on 7x12 lathe. Maybe that will help.