With the larger machine I would go with the integrated display and oil/water proof sensors. I am not sure what type of sensors the inexpensive iGaging scales use but they can be cut to length which I had to do for my mill. The advantages of the integrated displays puts them in a much higher level than just the scales with individual readouts. I have not had any contamination problems with the inexpensive iGaging scales other than one bad cable. I did make some "scale covers" from light weight cloth just to keep the chips out but they are not oil or water proof. The integrated readout panel sure is interesting.
For the larger lathe I would certainly want oil and water proof scales. The shielded cables look very nice on the 2 axis that C-Bag noted and I would want that for the lathe. I did not put them on the lathe since the lathe is so small I thought they would be in the way and would certainly get oil and coolant on them. On the mini mill they are a bit more protected and the inexpensive ones seem to work pretty well.
Hope I answered all the questions and thanks for all the comments.