When I had one, I would just apply a few drops of very light oil onto the shaft about once per year. It was a 1970's Delta lathe that I owned for twenty years. Never had an issue.
Pretty much any good lube will work. If the mechanism is exposed to sawdust and other gunk, anything that isn't 'wet' is best, like wax, dry lube, graphite, etc… otherwise, light machine oil is a good choice. I'd stay away from greases, as they are just dust magnets, even in environments where there shouldn't be. Here is a snippet from a Powermatic manual with their recommendation:
I use a dab of grease on the sliding pulley area only. Wax just didnt provide enough friction reduction. Wax is used on all other areas. Over 5 years of use that small amount of grease hasnt been an issue with dust or dirt - the mechanism works great.
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