Vince,
No, you don't need to draw in the XZ plane.
I do not think you can change the axis definitions in Autocad or Microstation such that Z equals the X axis or for that matter Y equals the X axis when drawing. My CAD experts at work only laughed at me when i asked them to do a modificatioin to the dxf conversion tables so i could convert it that way. Looked at the 2" thick manual and gave up! I let that brainy idea die.
Just draw as normal the lathe programs will do the rest.
Lazyturn is not ready for use, use Lazcam Turn, and be ready to invest some time for learning it.
RICH