Which version of the red wizard’s circle magic is correct, the text or the example?

Question

Dungeon Master's Guide page 194, Circle Magic feature of the Red Wizard prestige class reads as follows:

Circle Powers: The first use of circle magic is to empower the circle leader with the strength of all the participants.

This requires 1 full hour of uninterrupted concentration on the part of all participants and the circle leader. Each participant casts any single prepared spell, which is consumed by the circle and has no effect other than expending the prepared spell. The spell levels expended by the circle participants are totaled as circle bonus levels. Each bonus level may be used to accomplish the following effects.

• Increase the circle leader’s caster level by one for every circle bonus level expended (maximum caster level 40th). This benefit applies to level dependent variables of a spell such as range or duration, and to level checks (dispel checks, checks to overcome spell resistance, and so on).

• Add Empower Spell, Maximize Spell, or Heighten Spell metamagic feats to spells currently prepared by the circle leader. Each circle bonus level counts as one additional spell level required by the application of a metamagic feat to a spell. The circle leader may add one of the three listed feats to a spell even if he does not know the feat or if the addition of the feat would raise the spell level past the circle leader’s normal maximum spell level (maximum spell level 20th).

These effects last for 24 hours or until expended. Circle bonus levels may be divided up as the circle leader sees fit.

For example, the Red Wizard Hauth Var leads a circle in which four participants each cast a 2nd-level spell, so that Hauth Var gains eight circle bonus levels. Hauth Var chooses to use three circle bonus levels to maximize his cone of cold spell, three to increase his caster level from 10th to 13th for all level-based variables in his spells, and two to provide a +2 bonus on any level checks he needs to make. The maximized spell is used up whenever he casts his cone of cold, and the other two effects remain for the next 24 hours.

Honing in on that example of the Red Wizard Hauth Var, he uses 3 spell levels for all level based variables of the spells he casts and 2 spell levels to provide a +2 bonus on any level based checks he needs to make. However the first bullet point of the quote outright states he gains both the benefit of level dependent variables AND to level checks. Which version is correct the bullet point or the Hauth Var example, I'm assuming the Hauth Var version and the text should more accurately read:

Each bonus level may be used to accomplish the following effects....

• Increase the circle leader’s caster level by one for every circle bonus level expended (maximum caster level 40th). This benefit applies to level dependent variables of a spell such as range AND duration OR to level checks (dispel checks, checks to overcome spell resistance, and so on).

Is this correct? I have examined the D&D 3.5 Dungeon Master's Guide errata however no correction is present.

Answer 1

The example is incorrect. In general, an example never has any rules weight in D&D 3.5, but sometimes might be a clue to the author's intent. Here, however, that's not the case; we can easily trace the error.

Poor Hauth Var was copied directly from page 59 of the 3.0 edition book The Forgotten Realms Campaign Setting, which describes how circle magic works. When they updated Red Wizard for 3.5 edition, the designers combined the first and third effects of circle magic: bonus to caster level, and bonus to level effects. In 3.5, a bonus to caster level necessarily gives a bonus to caster level checks and dispel checks (though that can be capped by the dispel spell in question), so the bonus to level checks option was redundant and removed from the ability. They just forgot to update the example.