B737 FLT CREW LEVEL OFF 1000 FT LOW WITH THE WRONG ALTIMETER SETTING ON DSCNT INTO ORD.

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DSNDING ON VECTOR INTO ORD ON THE KOKOMO 1 ARR. VECTOR TO BEARZ INTXN. HAD BEEN GIVEN A DSCNT TO 11000 FT MSL. ALTIMETER SETTING WAS LOW AT 29.24. COMPANY PROCS OUT OF FL180 IS TO DO PRELIMINARY CHKLIST WHERE THE APCH IS BRIEFED AND ALTIMETERS; AIRSPD BUGS; AUTOBRAKES; ETC; ARE SET. BECAUSE WE HADN'T RECEIVED A RWY YET; WE DELAYED THE CHKLIST. WE HAD DONE THE ITEMS VIA COCKPIT FLOW PATTERNS BUT NO BRIEFING OR READING OF THE CHKLIST WAS ACCOMPLISHED. CAPT HAD SET 29.34; BUT FO WHO WAS FLYING; SET 30.24 BY ERROR. CAPT NOR FO CAUGHT THIS ERROR. FO LEVELED OFF AT 11000 FT BUT IN REALITY WE WERE AT 10000 FT. OUR ALT ALERTER NEVER WENT OFF TO REMIND US SINCE IT WAS TIED TO THE FO'S FLT DIRECTOR. EVERYTHING LOOKED NORMAL. CAPT WAS NOT PAYING CLOSE ENOUGH ATTN AND ALL LOOKED NORMAL. WE WERE 1000 FT LOW. CTR QUESTIONED OUR ALT; AND THERE WAS CONFUSION AT FIRST. WHO WAS RIGHT? WHY HAD THE ALT ALERTER NOT GONE OFF. DISCOVERING OUR ALTIMETER DISCREPANCY; WE WENT BACK UP TO 11000 FT WITH THE CORRECT ALTIMETER SET IN BOTH ALTIMETERS. NO CONFLICTS WERE MENTIONED. WE OVERLOOKED COMPANY PROCS AT FL180 REGARDLESS IF YOU KNOW THE APCH. GOOD LESSON LEARNED AND WON'T BE COMPLACENT AGAIN.