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...... and the Magic Wand
Tolerance 200 selects
the entire window
tolerance settings effect the way the selected tool performs it's function on an image. High tolerance settings will effect a larger area of the image than low tolerance settings.
tolerance 100 
For these examples, I have selected different areas of the image, using tolerance settings of 0, 50, 100, and 200. To demonstrate the magic wand, I have deleted the selected area.
tolerance 50
The tolerance setting and the magic wand can be used to select areas of detailed images that you want to alter in some way. If you've ever tried to cut a background out of a photo, leaving just the main subject, you know how difficult it can be. By setting the tolerance level you can isolate your subject and remove the unwanted sections with greater efficiency and ease.
tolerance 0
A tolerance setting of zero selects such a tiny area in this case, that the results don't even show in the example.
.... and the Paint Tools
tolerance 0
For this example, I've chosen the Fill tool with the fill style set to none. No area of the image was selected, the fill being applied to a white area in the center of the image. With the tolerance set to zero, a small area of the image is affected.
tolerance 50
In the second example, the tolerance was set to 50, no specific area of the image was selected, and yet the effect of the fill tool remained in the white area of the image, giving the impression that the magic wand had been utilized.
tolerance 100
With a tolerance setting of 100, the entire white area of our image has been affected by the fill tool, with the exception of the interior areas of the text.
tolerance 200
And finally, a tolerance setting of 200 changes the entire window when the fill tool is applied.