Just one word of caution. I tend to think many people get turned off by live steam when they hear about he machinery that is "required" to build the locomotives. I know of a guy who built the most beautiful 3/4" Raritan you ever saw using just a 6" Atlas with a milling attachment and a decent drill press. He is not a machinist by trade either. It just shows that even with a very limited budget, beautiful models can be built.
I'm one of those guys on a limited budegt, so I will stick with my beloved Sherline lathe, Burke/Sherline mill, and a 7" Potter if I need to turn something a little larger in diamter. Besides, fixing up the old stuff is half the fun! J.R.