A number of on-line signal processing algorithms are being proposed for digital image processing. Some of these require recursive iterations in the arithmetic computations. For example, 2-D recursive filters are being used to transform and/or filter digital images in microprocessors. Inherent to microprocessors is the extremely short wordlength (8-16 bits) and, as a result, arithmetic operations are no longer precise and "C" noise is evident. These machines are being further proposed for adaptive filtering operations which aggravates the truncation/rounding effects since computations are now nested and errors are no longer statistically independent. In this paper the effects of truncation/rounding are depicted in the above setting by simulation examples.