I am trying to use QGIS 2.8 to simplify vector geometries. But I do not understand the significance of the Simplify tolerance value in the Simplify geometries tool.
The documentation does not explain it.
QGIS uses the Douglas-Peucker algorithm (slightly modified to handle closed loop like polygons, I think) and the unit of the tolerance parameter is the same as the unit of the reference system. Points are removed if the distance with the tentative simplified line is smaller than the tolerance.
The tolerance is a threshold that will usually determine the distance in which multiple nodes may be reduced into a single node or more.
The documentation says the input for tolerance is a number and FWIW it represents map units from the coordinate reference system (ie, metres).