My tolerance for alcohol is shot with Zoloft. Another consideration is that alcohol is a depressant and doesn't really help your situation. Just remember your body can't handle as much booze and you'll be OK. :)
There are potentially dangerous reactions like blackout, change in blood pressure, etc, but they are not common. It would hard for me to recommend anything but for you to follow the recommendations. I can tell you for sure it is not just a way to get people to stop drinking. Most patients don't have problems with the combination, but you can't entirely ignore the warning.
In the case of Zoloft in regular patients, there have been no major discoveries pertaining to the interaction. Oftentimes, people who take SSRIs and drink alcohol concomitantely will experience an intensification of alcohol's impairment on psychomotor functions (1 beer would impair you similarly to how like 3-4 beers would impair someone else). This did not appear to be the case some testing with Zoloft, but just to be on the safe side, using alcohol with Zoloft is advised against as it may potentially inhibit Zoloft's effectiveness as well. A bit of alcohol now and then shouldn't hurt you much, but to be on the safe side, alcohol should probably be avoided as much as possible.
JuJu,
I've found that my tolerance for alcohol decreases while starting out on a new med, but after a while, it goes back to normal. For me, it's just like any other start-up side effect in that it goes away once you're used to the medication.