If your store is set to "Calculate in real time, OK if no matching rule," orders will be charged shipping according to your ship rates as the order is placed (hence, in real time). If customers choose a shipping address/shipping method combination that is not covered by your rules, they will not be charged shipping and the order will still go through.

If your store is set to "Calculate in real time, error if no matching rule," orders will again be charged shipping according to your ship rates as the order is placed. But, in this case, if customers choose a shipping address/shipping method combination that is not covered by your rules, then an error message will be returned to your customers, and they will be prompted to select a different shipping method.

Please note that the "error if no matching rule" setting only checks to see if the shipping address and shipping method combination chosen by the customer is one that is covered by your rules. If you have rules that are set up to only look at the address and are not specifically set up for one shipping method as well, then no error will be returned if someone uses a valid shipping address (under that rule) for their order.

For example, if you've got a shipping rule that applies to "Inside United States" and does not apply to a specific shipping method, then any order with a shipping address inside the United States will be allowed to go through, whether or not any of your rules are actually able to come up with a shipping charge for that order.

Also, if you're using the built-in shipping tables for your shipping rules, the "error if no matching rule" setting does not mean that errors will force the customer to choose another shipping method.

For example, if you've got a rule set up to apply to addresses inside the United States and a shipping method of "UPS Ground" that calls the UPS calculators, and someone enters "PR Puerto Rico" as their state, and they select "US" as their shipping address country, and they select "UPS Ground" as their shipping method, then the UPS calculator will return an error that ground shipping is not available to that address, but it will allow the order to go through with a zero shipping charge. This is because "PR Puerto Rico" is a valid USPS "State" code that is considered to be inside the United States.

This is why it's important to make sure the way you set up your rules covers all possibilities of shipping addresses and shipping methods you will accept when you are using the "error if no matching rule" setting.