We tested healthy young and older adults as well as higher-scoring (Mini-Mental State Exam, MMSE, scores between 14-20) and lower-scoring patients diagnosed with probable Alzheimer's disease (AD) on a letter-matching task. Subjects were instructed to respond "same" if two simultaneously presented letters were identical, or "different" if the letters did not match. Healthy older adults showed a larger "fast-same" effect than healthy young adults. Also, higher-scoring AD patients showed a large "false-different" effect for errors, but lower-scoring AD patients showed a large "false-same" effect. These data indicate that older adults exhibit higher neural noise levels than younger adults. The cross-over error pattern for AD suggests that moderately demented AD patients show evidence of forming degraded visual percepts whereas more severely demented AD patients show evidence of forming incomplete percepts.