Is the per-vertex error over a PageRank iteration monotonically decreasing?
No. Consider the case of an isolated component with a central vertex v that is pointed to by vertices x_1, ...., x_k. The initial value at v is 1/n, and the final value should be roughly k * the restart probability/n. But the value at v in the second round is roughly k/n. If the restart probability is significantly less than 1/k, then the value got further from the ultimate value.