I swear some people are just lazy :). Below is the abstract from the artical a few people have mentioned reading once.
The whole point of the 1% incline is to approximate the energetic cost of overground running with air resistance.
Google this for the artical...
Jones & Doust
A 1% treadmill grade most closely approximates the energetic cost of running outdoors.
When running indoors on a treadmill, the lack of air resistance results in a lower energy cost compared with
running outdoors at the same velocity. A slight incline of the treadmill gradient can be used to increase the
energy cost in compensation. The aim of this study was to determine the treadmill gradient that most
accurately re¯ ects the energy cost of outdoor running. Nine trained male runners, thoroughly habituated to
treadmill running, ran for 6 min at six different velocities (2.92, 3.33, 3.75, 4.17, 4.58 and 5.0 m s-1 ) with
6 min recovery between runs. This routine was repeated six times, ® ve times on a treadmill set at different
grades (0%, 0%, 1%, 2%, 3%) and once outdoors along a level road. Duplicate collections of expired air were
taken during the ® nal 2 min of each run to determine oxygen consumption. The repeatability of the
methodology was con® rmed by high correlations (r = 0.99) and non-signi® cant differences between the
duplicate expired air collections and between the repeated runs at 0% grade. The relationship between oxygen
uptake (ÇV O2) and velocity for each grade was highly linear (r > 0.99). At the two lowest velocities, ÇVO2 during
road running was not signi® cantly different from treadmill running at 0% or 1% grade, but was signi® cantly
less than 2% and 3% grade. For 3.75 m s-1 , the ÇV
O2 during road running was signi® cantly different from
treadmill running at 0%, 2% and 3% grades but not from 1% grade. For 4.17 and 4.58 m s-1 , the ÇV O2 during
road running was not signi® cantly different from that at 1% or 2% grade but was signi® cantly greater than 0%
grade and signi® cantly less than 3% grade. At 5.0 m s-1 , the ÇV O2 for road running fell between the ÇVO2 value
for 1% and 2% grade treadmill running but was not signi® cantly different from any of the treadmill grade
conditions. This study demonstrates equality of the energetic cost of treadmill and outdoor running with the
use of a 1% treadmill grade over a duration of ~ 5 min and at velocities between 2.92 and 5.0 m s-1 .