Ken,
This parameter has to do with the machines ability to move to the commanded position verses the actual position. It is the acceptable "zone" that it allows for the machine to be "in position". This basically has to do with "slop" in the drive system. It can and will affect repeatability of the CMM. Often people "bump up" this parameter to mask a drive problem in the machine. I would set it down to factory default setting and check the drive system. If you ran a repeat test you should be able to see how it affects the performance.