try setting undersample 512 and treshold at 0.5 and you will se blockiness occur. Undersampling can yeald faster renders especially when there is large surfaces with almost the same color. The treshold values tells Kray how much difference it can tolerate. Try it.
So, larger undersample, faster render. Lower undersample, slower but better looking render?!
Basically, yes. However, when using full-screen grid anti-aliasing, you should always use at least a little undersampling, since it will actually speed things up! If you don't want the undersampling to actually do anything, set the threshold to zero. With no undersampling, it will render a bit like Lightwave does, in passes. With undersampling, it will render everything at once with full anti-aliasing, which is usually faster.