Feel free to reuse this material with the following citation:
Peterson, F. and Fischer, M. “CIFE Wiki Technical Report: AutoCAD Civil 3D Modelspace Units.” CIFE wiki. Stanford University Center for Integrated Facility Engineering. Last accessed dd month yyyy. http://cife.stanford.edu/wiki/doku.php?id=granite:3dmodelling:modelspaceunits
The unit of measure in Civil 3D became a question back in March of 2010 when lab-experiments began for the software that possibly would be used on the MER99 experiment. I was confused by the default Imperial and Metric installation and why there were two separate icons on my desktop; which to use and am I then trapped in one unit of measure or the other and why. The first indication that the question has larger implications is the observation in the C3D Metric template of a dialog box that set an object to 7.20 Meter which when zoomed out had a dimension of 7.20 Inches - documented in this video clip http://granite.web.stanford.edu/civil3D_units.avi.
The specific problem guiding this research problem: If the modelspace unit is set ‘feet’ then the stationing is incorrectly displayed in 'inch'
AutoCAD Civil 3D has two 'flavors' of the same underlying source-code that has some hard changes.
The first concrete answer: “user Profiles used during startup… the difference is the template set as the QNew template, these are Metric and Imperial.” (C3D blog)
A review of the AutoCAD Civil 3D documentation, the Wiley Mastering AutoCAD Civil 3D 2010 Authored by James Wedding, and search of and participation in online forums here (profile view text), here (modelunit), and here (inquiry tool) did not provide the complete answer only pieces and a good foundation to begin from. A query of two knowledgeable C3D modellers by email found that it is important to start with either metric and imperial template and stay within one - why was not known. From review of text, blogs, and query of experts the following graphic of C3D settings related to model-space unit and unit of measure was assembled. http://c3dpeanuts.wordpress.com/2010/03/10/converting-civil-3d-objects-from-imperial-to-metric-and-vice-versa/

Figure From web forum review and participation the seven ways to change the modelspace and quantity units.
Base question: “what is the difference” between civil 3D metric and imperial
The research will progress through 1) web search, then 2) expert query, 3) testing the software with niche scenarios, then repeat from 1;
Figure The command aecdwgunit and the ambient settings found in the drawing utilities/drawing settings/ambient settings provide access to all the known settings.
There was no clear answer for several months. The most compelling evidence was a corridor cross section that was in the metric unit of measure meter but when dimensioned it was in the Imperial inch, the same measurement 7” == 7m. This indicated that the software developer had used the same source code with only a change of the unit of measure from inch to meter and the elimination of the source code that aggregated measurements of foot and yard. This was counter intuitive since this intuitively would cause problems later since the geometry (likley pixels for a given display resolution) for the length represented by 1-meter differed in the Imperial and Metric versions, they are incompatible but represent the same dimension. At the stage of the MER99 experiment where the quantities were addressed this issue was revisited. The MER99 model was modeled in the Metric template in 'true' scale of 1-meter = 39.370079-inch; the conversion required an excel calculator but the same would have been necessary if modeled in the Imperial template since the original dgn plans were in metric. Modeling in the Metric Template with the metric representation used by Autodesk was avoided since it was not certain if all 3rd party developers had worked closely with autodesk and their software understood the units in the model dwg. As it turned out the vendor tools appeared they did understand the units and as anticipated (lucked out) it was easy to convert between metric and imperial templates. A discussion with Autodesk validated the suspicions.
The default setting for the metric and imperial template

The inch modelspace unit of measure does not appear to have detrimental affects when combined with the engineering unit of measure type. The 'inch' msu appears to behave correct and is a valid msu. As expected, when the modelspace is changed to feet or the unit of measure is changed to decimal, the application cannot accommodate an inch msu, the displayed units of measure are incorrect. In seven separate tests the inch msu passed the four metrics when the unit of measure is engineering, the unit of measure failed to correctly display in the properties display. The tests show that the scale and ambient units have no affect on the display in this scenario.

Figure If the modelspace unit is changed to feet then we should expect the quantities to no longer be displayed as engineering (modelspace unit / 12 including decimal remainder to represent inch) to only feet, similar to decimal.
Following the test sequence is a period of pragmatic use of the application in inch modelspace unit and continued discussion on the forum thread.
Initially, the difference between the C3D imperial and C3D metric versions guided this inquiry; the focus became general to the behavior of C3D unit of measure settings. At different times the inquiry tool, toolspace pallet, toolpallet retaining wall, text height, and quantity takeoff unit of measures were clearly incorrect but it was unclear why, how to test for why, and what variables are provided in C3D. A review of the existing literature and blogs gave pieces of an answer to these questions. The previously mentioned texts established a baseline documentation of some available settings and the blog discussion established that the topic is tacit and accepted as outside the domain of the software developer documentation. Through testing a polyline, this inquiry resolves the observed initial behavior of the Civil 3D unit of measure variables, provides what those variables are, and suggests a process for testing which variable is causing an issue. The profile view text height and toolpalette retaining wall are still unresolved. This contribution now allows those working in the C3D space to systematically approach the unit of measure knowing the variables available. If a reader has the same issue as used here then they can reuse the results without further testing.
In one blog the contributor stated that Autodesk C3D software engineers assumed that a sub-foot unit was not necessary and so selected foot at the base modelspace unit. As a result, elevations in increments of less than a foot are not possible except for the use of a workaround. Possibly, the solution found here resolves that issue - simply model in inch modelspace unit; further testing is necessary to find this but the possibility is given here.
Some of the blog reviewers raised the argument that according to the intended application of Civil 3D and as the documentation provides for, C3D only works in modelspace units 'feet'. This is known as the neat approach in computer science. From the pragmatic or real world tests done here it looks like - while they are correct - the modelspeace unit 'inch' does not affect the specific application of the C3D application here on the Merced 99 project. It may be that the C3D algorithms like superelevation calculations based on design speed are what will not work - this was not tested and the blog did not give specifics. Also, the retaining wall given in the imperial tool pallet is still metric and the profile view text in in metric scale; both are extremely small and therefore unusable. These were tested and corrected - documentation is in this wiki.
This study began with the Metric template, a dimensional 3D model using the dimensions in inch and then changed from metric settings to english settings, these settings then modified to adjust for the inch unit. Nobody is likely to replicate this process since it was a deliberate misuse of the c3D application intended to 'shake-out' the details of the units and find the boundaries of the application and the behavior of the units functions and settings.
Further testing with original models made in modelspace feet and engineering type compared to modelspace inch and engineering type. Also, testing area, volume, and corridor surface objects will expand the contribution from just polylines.
Right now the model space unit is so intuitive and clear that this entire page seems unnecessary. But, on my first day of modeling with a bunch of dgn MER99 project files ready to convert into dwg, the very first task of choosing the C3D Imperial or C3D Metric icon to start the 3D modeling process was the most confusing thing I have ever experienced. Where were my 4D glasses when I needed them!
Dissemination is through wiki post and blog links to post
Thank you to the following autodesk forum contributors: wfberry, sinc, MichaelMerlino7407, Patchy, peterfunkautodesk, gccdaemon, and BrianHailey. Early during this process (back in January 2010) Amir Kavousian helped explain the Civil 3D settings and Dana Probert provided some coaching.