I replaced the flat belt on my lathe with a timing belt turned inside
out. While it's much better than the old, dried up, cracked leather
one, it still seems to slip too much. Since I don't want to over
tighten it, how can I tell how tight is right?

It seems that for a given size motor, you should be able to get a
certain cut for a given material and you could tighten the belt until
that happened. E.g., a 1/3 hp motor should be able to a take a x deep
cut, at y feed, at z rpm in d dia 1018. If the belt slips for this set
up, it's too loose.

Or, can I just use the old 1/2" (?) deflection rule? Does that apply to
inside-out timing belts?

Thanks.
Bob