Hi Chris, If you have a look at most of my posts in "projects" you will see one of my lathes that uses collets.
I use them all the time. Basically they hold the work very accurately, unlike a chuck. I can lathe a bar, take it out the collet, walk it around the block and put it back in the collet and it will still be true. Well almost, most of the time it is true, occasionally some dirt has crept in at some point.
Hope this helps...