All of the buoys on the Great Lakes report what is called the significant wave height, which as someone said earlier is the average of the highest 1/3 of all waves measured during the reporting interval. Each wave is measured trough to crest. For example if the buoy measures the height of 9 waves the buoy will report the average peak to trough height of the highest 3 waves. This measurement will be higher than the average, but lower than the highest measured wave. As a rule of thumb the highest measured wave can be up to 2x higher than the reported significant wave height, which is why some folks say to double the reproted wave height. For folks in a smaller boat they will certainly tend to judge wave height based upon the highest wave measured over a few minute period.

Take note that NOAA's weather forecasts are also estimating the expected significant wave height, but often defaul to a "range" of heights (e.g. 1 to 3, 2 to 4, 3 to 5) that cover the forecast over a larger area and time scale.

The buoys are VERY accurate and you can be assured that the data they are reporting is what the conditions are at that station at that time. In addition wave forecasts will match the actual forecasts IF the forecast can ge the wind right. NOAA tracks the accuracy of their wave models (that are run usign the actual measured wind speeds) versus the actual wave height measurements and they are always very close. Here's an example of the model-data comparison for the 45005 buoy

http://www.glerl.noaa.gov/res/glcfs/...5005&year=2013