I tried it with a smaller file. What I found is that, for example, you have a line made up of three points, the two ends and one in the middle that is slightly out of line. The generalize function will remove that middle point and make a straight line. This is especially noticable on contour lines. On the small files I tried, it looked like the error was ~ 5 feet. This is not a big deal on contour lines, but I did notice it happened to some roads.
I have a feeling that cgpsmapper does the same thing when the generalize and intersection is selected for preprocessing. However, if I went with no preprocessing to save the accuracy, not all of the interections on roads would meet.
Sam