Depends on how much money you want (or can) spend, Tony. More money gets you more resolution, but you have to decide how much you need for your projects.
Dial indicators can be as cheap as $10, and you can eyeball them down to about .0005" if you read between the lines. Even the low priced DTIs run about $50, but .0005" is common resolution on them, and you can get models that read to a closer tolerance than your machine will hold, so there is a point where there is no return for the money you spend.
If you can get along with reading between the lines for an approximate 1/2 thou reading on a regular dial indicator, you can save some money and buy more tooling (cutters, etc).
I have a couple of nice DTIs, but I don't use them when a simple cheap 0-50-0 dial indicator will do the job, which is most of the time. Again, it depends on what you're making.
I don't usually recommend "cheap" when it comes to measuring tools, but this is one place that the cheap import dial indicators seem to do okay at. If saving money on a dial indicator over a DTI means that you can get something like a four jaw chuck for your lathe, it's definitely worth it, IMO.
Dean