To add on to the above, consider that a collet chuck has a standardized internal taper that is supposed to be precision ground. This shape is supposed to be matched on the exterior of the collets that fit the taper. When the collet nut or draw bar locks the collet in place, all the collet does is collapse into this taper. There are no real moving parts in a collet; it just collapses down onto your part or tool and this maintains as much concentricity as the chuck and collet are capable of. In contrast, all non-set-true scroll chucks have radially moving parts and by design cannot be nearly as accurate as a collet. A 4 jaw independent chuck and set-true type scroll chucks, on the other hand, have the potential to be even more accurate than a collet.
An ER collet chuck and similar chucks are good for holding an already turned part or one with an accurately ground surface. In these cases, it can be pretty accurate. A 5C chuck can hold nominal stock with a smooth surface, like cold rolled stock or smooth extruded stock; it isn't nearly as accurate when holding this kind of material as it is when holding ground stock but it is fast to use and secure enough for work holding. Collet chucks are also good for holding threaded parts without damaging the threads.
For general work, a 3 jaw chuck is fine for any first operation (initial turning). For second operation work (holding a part that has already been turned), a collet chuck is fine. So is a 4 jaw independent or a set-true type chuck.
Bottom line: buy a collet chuck, like an ER chuck, if you need to hold threaded parts or if you abhor the 4 jaw chuck. If you plan to do production runs with cold rolled nominal stock then a 5C collet chuck makes sense. Otherwise, collet chucks for the lathe are largely superfluous in a hobby shop.
