Am i missing something here?

Why don't you just learn English decimal..... It's kind of very, very simple to do basic conversions in your head.

In the trade we use 40 thou (.040) = 1 mm its a tad over but more than adequate as long as you know very basic times tables (and if you don't and you have bought a lathe, something is wrong) its as easy as it gets.

So lets say your machine cross slide lead screws/ dial work as most lathes do (not all) and it removes double the amount you put on the screw.

You need to remove 2mm from a diameter, you touch the job or turn a diam to clean up the stock material.. this means you need 1 mm on the dial because when you turn, you machine both sides of the part because its rotating (a basic thing that a lot of newbies don't get) so 1 mm is 40 thou so you put a cut on of 40 thou... there is your 2 mm cut.

1 mm 40 thou
2 mm 80 thou
3 mm 120 thou and so on its a the 4 times table... it cant get much simpler.

Now to go in the other direction.
.75 mm 30 thou
.5 mm 20 thou
.25mm 10 thou
.10mm 4 thou
.05mm 2 thou

These are the rules we use in the trade and it really is simple to follow. I expect a lot of here will also use these rules it's not really rocket science to grasp.

If a dim has to be a good size or has tight tolerance then you never normally say, oh 3 mm cut and hope you have the thing within a thou or less. You always, cut measure, cut measure, cut measure. Always make that cut smaller than the dimension you need so you gradually get nearer the size you need. Experience will speed up this process.

There is nothing wrong with the advice you have been given its all sound.... but to me, learning how to use the machine is the answer not making the machine learn how to work to you.

Really is no need to alter anything on the machine, the lathe isn't really the problem, its about you learning to use it This is a much cheaper solution.