yes, the old-posts-not-showing-up-issue is a bit counterproductive - could you post a feature request or bug report on it? There might be one already since I remember someone else pointing it out.
I am pretty certain that Wishgranters 0.5 is, as you sais, the error in the alignment report. But to achieve it it is sometimes necessary to lower the Max repro error threshold.
in the alignment settings Max feature reprojection error is in pixels, it is an internal precision level used during alignment. It means that if you set this value to 2, the Maximal error after the alignment (in the Alignment report) will not exceed 2 pixels. I agree with Götz, I believe Wishgranter meant the Mean error in the alignment report.
To complete the answer, a good approach is to start with a tolerance of 2. Then, if there are enough points, lower it to 1.5 or 1 to increase the precision. From experience, a tolerance of 0.75 gives an average margin of error of 0.20-0.25. but, of course, the number of points decreases dramatically. But starting with a tolerance of 2 avoids creating multiple components.