I square up blocks for easy patterns where there are no points and seams don't have to line up exactly. Rail fence would be a good example, and 9-patches are pretty forgiving too. In this case, I square them all up to the smallest block (assuming the smallest block isn't too far off. If it is way off, I discard that and look for something closer to reasonable.)
It really helps to make sure all of your blocks are the same size before you start putting them together. Squaring them up is one method. However, there are other methods that can be used when points are critical or where you just don't have any excess fabric to lose. If you go to
http://www.youtube.com and search on "Sharon Schamber", you will find several video examples of different methods. One video shows how she cuts off excess fabric to true up a block. Another shows how to block with spray starch to shrink in excess fabric on a block that is too large. I think another shows how to block a too-small block with spray starch, to stretch it to size. Blocking is a lot more time-intensive than just trueing up with a ruler and rotary cutter, but sometimes blocking is the only method that will keep points from getting cut off.
Mary