Both coherent and differentially coherent PSK (CPSK, DCPSK) systems are currently being used in wireless communications with equal-gain combining diversity. Since recovery of carrier in coherent systems is often imperfect, and results in degradation in system performance, it is invaluable to evaluate the performance of CPSK with imperfect phase and compare it to the performance that can be obtained with DCPSK. The detection loss suffered and the phase precision required for the carrier recovery for different error rates and with different degradations are derived. Generalised fading channels including Rayleigh, Ricean and Nakagami-m are investigated. The analysis is based on a convergent infinite series for the cumulative distribution function (cdf) of a sum of independent random variables. The results will enable designers to determine when DCPSK becomes the desirable method of modulation compared to CPSK in wireless systems.