Don't let our replies discourage you. What we are trying to help you do is make a purchase that will 1) perform all of your tasks needed for the work you will do, and 2) will be a machine that you will have years down the road without the "If I had only known ___ I would have bought a ___ instead of this" regret.
Your are right in that it is not a "black or white" decision. By identifying your needs, this will put you in the ballpark of what to be looking for, whether it be new, used, big, small, expensive, cheap, etc.
As far as tooling it up, the tooling over the course of time may and usually will add up to more than you pay for the machine itself. My advice here is to buy the machine you need, get a few bare basics to start making chips, and add the other tooling as needed. This way your outlay is spread over a period of time. (It's what I did; actually still doing)
The following is to be used as a guide, and in no way is stating that you need one size over another. Ultimately, the decision is yours, and we hope that you take the plunge into a very rewarding hobby! The guys here as you see are willing to help out, and as you narrow the list, there is likely a member here who is either using or has used the equipment you are considering and will be an asset in getting you further information on the unit(s).
There are a lot of people using lathes in the 7x12 range, and these lathes don't take up much room, nor are they enormously expensive. There are much smaller machines out there, and if you are doing very small work, these would be viable options. Personally, I have a 13x40, but my needs dictated the larger size machine for other things besides making models (matter of fact, I am looking at smaller machines myself for model making and other small work). Other sizes are certainly out there.
Some people have preffered to buy small machines to get going with the plans of "upgrading" in the future should they really like the hobby. This also has pros and cons with it (name one thing that doesn't!) in that if you have a unit that doesn't meet your needs, it may be such a discouragement that you drop the hobby all together and take up something else, or it may be the beginning of a tool fetish that some of us have (not meaning bad here!). Again, this is a personal choice, and may help you in you desicion process.
Hopefully this helps get you a direction to start looking.