Guys,
You're forgetting that the verified Mode 'C'limit is +/- 200ft. As I recall, the 1000ft for standard separation is purely to ensure that with one aircraft reading +200ft 'C' and an aircraft above it reading -200ft 'C'(ie the maximum permissable discrepancies) then a 'safe' margin of >500ft is kept. I much prefer "Negative RVSM"!!
Cheers,
ADIS