I bought a Jet heavy 13x40 single phase lathe late in 2005, and started having motor problems a little under a year later. After a couple of months fiddling with new starter contact points & etc., I scrapped the chicom POS and replaced it with a US Motors 3hp 3-phase, powered by a Westinghouse/TECO FM 215 VFD, which as Nat stated, converts single phase into true 3-phase, and is rated at a full 3hp, so the motor can develop its full rated power. The results were very pleasing, so when I purchased another lathe, I got the 3-phase version, and bought another VFD (went with a Hitachi SJ200, as the FM215s are no longer available).
Not only do the 3-phase motors run smoother, but I have both VFDs programmed for a 'soft start', which ramps motor speed up smoothly over a 2sec. time frame instead of just snapping into full RPM more or less instantly - this has got to be easier on the gearboxes. I've also programmed them both to coast to a stop, as I didn't order the optional braking resistors needed to keep the standard resistor from overheating when the unit is programmed to brake the lathe to a stop.
After my experiences with these two VFDs, I believe I'd use VFDs to control the machines even if I had 3-phase into my shop.