I find this feature quite useful, but when on a large site (like nytimes.com) double-tapping takes 8-9 seconds to zoom while the circular gesture works almost instantly. Anyone else has similar experience?

yes, definitely. I've found you really have to wait for the whole page to load fully before you can use the double-tap zoom method.

I haven't noticed the lag on zooming in as much as i've had troubles zooming out. There have been several times where i was zoomed in and not matter where or how fast/slow i double tapped, it wouldn' zoom out. Does anyone have any suggestions for why that may be happening and/or what to do when it does?

I think that is essential for the algorithm to work to have the whole page (or at least the interested frame/div area) loaded, otherwise how would double tap know how much zoom is needed? So looks like the behaviour is perfectly reasonable. As far the zoom out is concerned, i noticed the same, too, and usually it happens because lack of power (i.e. N900 browser working on other aspect of rendering and therefore not zooming out until the processor is available). Usually after few seconds the browser start responding again and will accept the double tap