Dear, oh dear.......
There are, quite frankly, some seriously ill-informed comments appearing on this thread. Let's just go back 10 years or so before most people had any GPS or glass in their light aircraft.
The altimeter suffers from a multitude of errors. Over the years, the majority have been minimized by good design. The major remaining errors are pressure, temperature and orographic.
Pressure error - this is effectively having a sub-scale setting which is different from the actual msl pressure. Not normally an issue at the airfield but can be when flying outside the circuit. As has been previously alluded, this is catered for by the regional pressure setting being given as the lowest forecast for the particular zone effectively giving the worst case. Note that if you fly from a high pressure region to a lower pressure region without correcting the sub-scale, your altimeter will over-read.
Temperature error - already explained in the thread. A lower-than-standard atmosphere will cause the altimeter to over-read. Normally the error is small but in extreme temperatures, procedural altitudes, min-safe altitudes and approach minima should be raised.
Orographic error - caused by the localized lowering of pressure by a strong wind over high terrain. Minimum safe altitudes are therefore raised under these conditions.
Now, ATC know all about these and so procedural and minimum radar vectoring altitudes all take this into account to ensure terrain clearance under all conditions. This was the case 10 years ago and is the case now.
Fast forward to today when a lot of aircraft have GPS. It is tempting to dismiss the error-strewn and "inaccurate" altimeter in favour of the fabulous new and "accurate" GPS. This raises 2 issues. Firstly ATC procedures are based on baro altimeters and so these should be used as the primary vertical reference even though we know that the actual altitude may be somewhat in error, since it will always be on the safe side. Secondly, if flying VFR then the main terrain clearance device is the mark 1 eyeball. You really should not be flying around below MSA in IFR or marginal conditions using your space-age looking but uncertified GPS and Synthetic Vision to fly down valleys - I am sure Dynon, Garmin et al will confirm that their equipment is not intended to be used this way.
To summarize:
- whilst the altimeter will not always accurately reflect your true altitude, the errors are either designed out or catered for by procedural or standard procedures to ensure terrain clearance.
- ATC altitudes are all referenced to the baro altimeter which should, of course, have the correct setting. Hence the altimeter should be used as the primary altitude reference.
- In areas of high ground, it makes perfect sense to use the GPS generated information to monitor terrain and increase awareness. Except in possible emergency or abnormal situations, the GPS should not be used for primary terrain avoidance.