In trying to use the Trace Tool to cut out art work inkjet printed on cardstock, the cut lines are about 1mm out of alignment with the artwork. I made a test template by printing a series of nested squares with largest square 4 inches on a side. The center of this was placed centered by eye under the camera. An Engrave was done and results show a 1mm offset for the engrave in the Northeast direction, where North is toward the back of the Glowforge.
I read somewhere that <= 0.25 inch alignment error meets current Glowforge specifications for the Trace Tool.
Is there any hope for getting improved trace alignment?
Yes. Your 1mm current error proves that - they used to be all 1/4" (6mm+) but they’ve been tweaking all the machines ever since. So you’re 6 times better than the standard 
They have said there are more improvements coming to keep tightening up the precision even more.
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And in the meantime if object alignment is critical you could use the following method:
Or use a jig (just search “jig” in the forum, you’l find tons of examples).
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This is exactly what I need. Thank you!
I searched the forum using key word Trace Tool and missed your tutorial.
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Thanks @jamesdhatch and @cynd11. @brok09, please open a new thread if you have another question.