Regressions of biological variables across species are rarely perfect. Usually there are residual deviations from the estimated model relationship, and such deviations commonly show a pattern of phylogenetic correlations indicating that they have biological causes. We discuss the origins and effects of phylogenetically correlated biological variation in regression studies. In particular, we discuss the interplay of biological deviations with deviations due to observational or measurement errors, which are also important in comparative studies based on estimated species means. We show how bias in estimated evolutionary regressions can arise from several sources, including phylogenetic inertia and either observational or biological error in the predictor variables. We show how all these biases can be estimated and corrected for in the presence of phylogenetic correlations. We present general formulas for incorporating measurement error in linear models with correlated data. We also show how alternative regression models, such as major-axis and reduced major-axis regression, which are often recommended when there is error in predictor variables, are strongly biased when there is biological variation in any part of the model. We argue that such methods should never be used to estimate evolutionary or allometric regression slopes.