JeffP, a quick change tool post is well worth the money, most of them have two positions for the tools, one running across the axis of the lathe and one running parallel to it.
Insert tools are very good but the lath tends to have to run at a higher speed to get the best out of them.
The letters and numbers show the type of tip and the composition of the carbide, for the types of metal we tend to cut I would say to get a tip tool holder that has a positive rake to it. This should cut like a normal HSS tool that has been well ground. You can get tip tool holders that work with a negative rake, these tend to use more power but can give a better finish to the job, but will show up any problems with the bearings and the gibs.
IIRC about the best size of tool for a Myford 7 is approx 10mm (3/8")
To check the centre hight above the bottom of the normal tool post put a length of say 10mm bar in the lathe chuck and see if the bar will go above the base of the slot in the tool post. See below.
When you get a length of bar that will fit in the gap. Measure the gap below the bar and the bottom face of the tool post slot, so if a 10mm bar fits divide it by 2 = 5 then add the gap dimension so if you can get 3mm below the bar the max. size of tool that you can use is 8mm. But if you get a quick change too post this does not matter too much as you can move the tool holder up and down.
OzzyO.