Need clarification on the parameters of analogWrite(pin,value)

jecalderon:
Ok.. The 255 steps from the fact that 0 counts as one of the allowed values which total to 256?

And.. is this correct that each step is 2.55% , or do you mean 100%/255 steps =0.392%/step
0.392%/step
What about the frequency? It is lock at 980 Hertz.. And there are a lot of instruction going on in the microcontroller. Therefore, isn't a 1 step just getting too close to the device clocking limits?
The analogWrite function is utilizing one of the three internal hardware timers in the AVR 328P chip, so once a duty cycle value is sent to the function the actual PWM is all done continuously and independently of the program, so no real effect on the rest of program performance.
Sorry about the line of questionings. But I am building an optical device engine 100% with Arduino. It need a lot of precision and will like to understand that the realistic limitations are between the memory latency , speed and instruction.

Thank you all guys for putting up with me.