Hey Eric,
Attached is a screen shot of the coordinate system that I am using. Also under General>Units in data frame properties, my map is set at meters and my display is set to kilometers.
My inputs are all features/vectors. I'm not entirely sure what you mean by, "are you using Cell Size setting in the environments" but I do have values in for the parameter of output cell size.
The thing is, I have two tools created using modelbuilder and both do generally the same thing. However one appears to output in meters and the other does not. The tool that outputs in what appears to be meters has 100 for output cell size, the tool that has a very abstract scale has an output cell size of 0.05.
The 0.05 value is inputted by the tool when I leave the parameter blank and if I change it to 100 the tool does not run.