GPS altitude discrepancies

I've been using a Garmin GPS396 unit for a couple of months now. I am
amazed at the accuracy of the elevation information. It always seems
to be within a few feet of the listed airport's elevation, for example.
I took it up in my old Cessna 170. The elevation at the airport was
right on. At altitude, however, it was off by as much as 600' from my
altimeter at 14,000'. Initially, I figured that my altimeter was off.
Then, I took it up in a friend's Malibu, and discovered similar
discrepancies from his altimeter. Again, the GPS is very accurate at a
number of ground points. I'm at a loss to explain this. I'm using
altimeter settings very near my location - so why would the altitudes
vary by so much?

In following up on this, I checked the GPS altitudes in the jet I fly,
but it was inconclusive. Using a nearby altimeter setting up in the
flight levels (around 35,000') the GPS altitude was different by a
couple hundred feet, and seemed to vary +/- 200'. But I don't know
how accurate the elevation is in this unit (Airbus 320), or even
whether it is corrected for differential. It is used primarily for
lateral navigation, and since the unit is about 5 years old, it may not
even have the accuracy of the latest from Garmin.

Does anybody out there have some thoughts about this, or maybe similar
experience?