Hi xjdubber,
I will apologise now for what I am about to say.
Sorry but I don't agree with what you are saying.
1. cutters can be over size, they can run out of true in the collet, the head may be out of square so the sides of the cut are tapered.
2. depending on the type of machine configuration cutter pull and push can come into play.
3. less than perfect cutters can cut under size in certain materials and over size in others.
4. when you are setting up a machine with a working area of 29 inches test cutting some thing an inch in size is not going to tell you the thing is stepping accurately over the entire length of travel. A 1 thou error over 1" is nothing but multiplied over 29 inch is rubbish.
5. if a machine is setup correctly using ballscrews the error over 36" should be no more than .006" with a standard grade ballscrew and no more than .001" with precision screws.
6. the machine should be clocked square and level, the table should be trepanned with a clock on a long arm mounted in the spindle to make sure the head is square to the table in both x and y, any slop and back lash should be removed and then the machine should be set up using a .0001" resolution dial gauge and slip blocks to get it to position accurately. The steps per unit should be to as many decimal places as possible, more the better.
7. if after all this is done, the machine is not accurate then the construction of the machine is too flimsy for the work to be done and should be beefed up or redesigned.
Graham.