Yep, Courtney, we're definitely using definition #1.
Definition #2 works in some situations (I tolerate going to the dentist... for example- no offense to my dentist, he's a nice guy, but the whole potential cavity thing just freaks me out!), but definition #1 is how we want to use the word Tolerant in our work on ourselves.
Tolerance and things that go with it (such as: flexibility, compassion, patience, open-mindedness, perhaps even humor) are antidotes to that nasty Perfectionism thing (that comes along with things such as: rigidity, impatience, harshness, isolation, judgmentalness, narrow-mindedness...).
In fact, turns out these two things are a bit mutually exclusive- you can't really be tolerant and perfectionistic at the same time... interesting, isn't it :)