5% is very standard in most circuits.
MOSFET do get an input, but it's not exactly a positive half-sine. I seem to remember (from theory) that some of those big caps are there to partly fill those voltage drops (to 0V) at 120 Hz. (60 Hx * 2)
The MOSFET is actually there to remove the 120 Hz "ripple" in an otherwise DC signal, and to level the output to selected voltages.
As most components, there is a 5% margin of error and so, the output may vary, within operational characteristics (i.e. the load), by that margin.
Of course if you use higher rated components (i.e. higher load), then your load would fluctuate through a larger operational characteristic, hence reducing the margin of error (and the heat, as a bonus). Alternatively, you can use better quality components, with tighter tolerances.
The R+C is actually a filter. (Correct me if I'm wrong here gmat, 'cause it's still early!). The combination can be calculated to filter out a specific frequency range. It is very commonly used in speakers, in the form of a cross-over, to separate the low frequency signals from the high-frequency signals, in order for the woffer/tweeter to get its rightful part of a sound.
I'll have to read up on switched supplies, because I haven't dealt with them in 10 years...
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