A properly mounted peep is close to the eye (as opposed to the Mojo, or more forward mounted type), and you really dont align the sights, your brain just does it automatically. You dont really "see" the rear sight, you look through it and focus on the front sight and your brain does the rest.
I find the peeps are slower to use for fast CQB/snap type shooting compared to the traditional military/hunting leaf type. A big open notch, something like the big notch in the HK sight barrel of the G3's, or even buckhorn type hunting sights, are much more effective.
If you have to have a peep, then a "ghost ring" aperture is a better choice for a rifle thats actually going to be used for something other than target shooting. You get the same basic result, just a little less precision. What you lose in precision, you gain in speed. A lot of the older Williams/Lyman type sights added later to many old hunting rifles, are best used with the screw in aperture removed, and kust using the remaing threaded hole as a ghost ring.
The smaller apertures are primarily target type sights, and not the best choice for a working type gun.
One other downside to peeps is lighting, and/or lack of it. Bright sun or light coming in low from behind tends to draw the eye to to the rear sight, instead of it focusing through it. You can force your brain to see through it, but it is still distracting. Lower light can also be a issue, especially with the smaller apertures. The ghost ring is again the better choice here, in both cases.
Zeitgeist - The movie
Zeitgeist - Addendum