Wallace,
Virtually any grade of steel will work, about the untimate is EN19 or EN21 which has a very tough core and take the process very well.
EN 21 is used for truck half shafts and EN19 is commonly used for spindles.
It's the last process in manufacture, everything needs doing first including grinding tapers and bearing surfaces.
The toolpost and quick change holders on my lathes have been tuftrided, it stops the day to day dings and the big TOS which is in use commercially and has been for about 15 years still looks like new.
If I make special taper tool holders like ER32 gear I have these tuftrided, again for a more durable surface.
It's not as good as thru hardening or case hardening but if it's like a tool holder the full heat treatment will cause distortion and then the added cost and time of having to sent it away for internal or external grinding makes it an expensive bit of tooling
According to the blurb the coating is only microns thick but if you do cock up and need to skim a surface it really takes some getting under even with decent tips and you get some spectacular fireworks off it.
As Nigel says cost could be a factor as the heat treat places charge a minimum labour charge and then by weight.
Our guys charge £34 minimum but the foreman keeps a book for me [ and other small users ] and tallies each job up and every so often I pay for what I have had done, this way I only get one minimum charge.
They used to have a bucket inside against the counter half full of salt water and a few 1/2" tuftrided rods sticking in it. At the water level it was just a flaoting crud and rust mass because of the crap in the air. If you pulled a rod out the top was clean and black, the bottom was slimy and at the transition point was a big crud washer which just wiped off leaving the whole rod clean and black.
The black surface is a matt black surface but if you then have the part hot blacked you get a real nice deep black shiny durable finish.