I pondered building one too, but I watched the sales at Harbor Freight Tools and picked up a full size lathe. It has an all steel frame, a good sized motor and will handle stock to 40".
For around $80 shipped I figured I'd have nearly that much in a homemade lathe by the time I got a comparable motor and the other parts needed.
http://www.harborfreight.com/cpi/ctaf/displayitem.taf?Itemnumber=38515