If you plan to only work on smaller things, a 7" lathe is OK... What kind of work do you have in mind? If there's a chance you'll ever want to work on bigger things, Rich is right... shop around for a bigger lathe. If you're really space constrained or, if you know for sure you're interested mainly in making small things then of course go with the smaller unit. Generally speaking, we recommend folks to get the biggest unit (provided its in good shape) you can.
If you get a machine that needs repair, folks here can guide you along but, it's easy to get in over your head if it needs any kind of resurfacing of the critical areas. There are many folks here can help you with that too but, it's more of a craft/art than you might be willing to commit to.
Ray