It delays one RTT, so if you have seen seconds of delays that means your TCP ACK packages were received seconds later for whatever reason (high load?). Decreasing latency in that situation would WORSEN the situation.
I was testing some low-bandwidth voice chat code using two unloaded PCs sitting on the same desk. I nearly jumped out of my skin when "HELLO, HELLO?" came through a few seconds late, at high volume, after I had already concluded it wasn't working. After ruling out latency on the audio side, TCP_NODELAY solved the problem.
All respect to Animats, but whoever thought this should be the default behavior of TCP/IP had rocks in their head, and/or were solving a problem that had a better solution that they just didn't think of at the time.
