After 2- or 3-star alignment the hand controller will display the polar alignment error it determined. This error has no bearing on the pointing accuracy, but on the ability of the mount to track objects for longer periods of time.
I don't remember 3.27 too well, but in later versions the procedure you describe appears to be PAE (pointing accuracy enhancement). It is only effective in the vicinity of the star used for PAE. The sky is subdivided into 80+ PAE regions IIRC. PAE is helpful for finding faint stuff you may or may not be able to see. At least you'll know it's in the centre of the field that way.
Cheers
Steffen.
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