The Sherline DRO reads the turns of the hand wheels, not the actual travel of the cross slide. Thus, backlash causes an error between actual cross slide movement and the DRO reading when a hand wheel is turned backwards. The solution is to turn the hand wheel past the where one wants to stop, and then it turn forward to where wants to stop.
The Sherline DRO has a backlash compensation function -- which I think is fine for non-critical work.
A nice feature of the current chip of the Sherline DRO is that one can choose to display mm on an inch machine, and inch on a mm machine. I plan to upgrade the DRO on my inch-based mill to the current chip, before I begin any British projects that are in mm.
I think that a disadvantage of the Sherline DRO is that the hand wheels are not resettable. Besides not being resettable, the reference mark is difficult to see. I intend to deepen it and fill it with white paint.