  Dark matter N-body simulations provide a powerful tool to model the
clustering of galaxies and help interpret the results of galaxy redshift
surveys. However, the galaxy properties predicted from N-body simulations are
not necessarily representative of the observed galaxy populations; for example,
theoretical uncertainties arise from the absence of baryons in N-body
simulations. In this work, we assess how the uncertainties in N-body
simulations impact the cosmological parameters inferred from galaxy redshift
surveys. Applying the halo model framework, we find that the velocity bias of
galaxies in modeling the redshift-space distortions is likely to be the
predominant source of systematic bias. For a deep, wide survey like BigBOSS,
current 10 per cent uncertainties in the velocity bias limit k_max to 0.14
h/Mpc. In contrast, we find that the uncertainties related to the density
profiles and the galaxy occupation statistics lead to relatively insignificant
systematic biases. Therefore, the ability to calibrate the velocity bias
accurately -- from observations as well as simulations -- will likely set the
ultimate limit on the smallest length scale that can be used to infer
cosmological information from galaxy clustering.
