I presume many of you have tried using openvpn with openwrt boxes
from linksys and so on. Any one care to let me know how's the
performance ? Assuming a non vpn has a latency x, will adding vpn
layer causes a latency of 2x ? How about CPU utilization ?

Regards.

It depends on the openvpn usage you have to. On the internet the VPN bottleneck ist most probably routing delay. I connect a WRT with another 80Mhz router through openvpn (running on both boxes) and perceive no significative delay.

CPU usage is very low, except during rekeying. I got then 2-4 seconds service interruption.

latency should´t be a problem.
I tried to ping my router at home, and the respond-time is 50ms over an unencrypted connection and about 60ms over an openvpn-connection. so I get a delay of 10ms over the encrypted channel

but I disagree with rAndy: cpu-utilistation is quite high.

with a "normal" broadcom-cpu with 200 MHz you get about 200-300 kByte/sec if you use AES-128.
I think blowfish is a little bit faster but don´t expect more than 500 KByte/sec, and you will have 100% CPU-utilisation.
It is not possible to use the crypto-engine of the wifi-device, and afaik there are no linux-drivers for the hardwarecryptoengine which is integrated in some newer broadcom-cpus (the wl-500g premium has such a chip).

If you need better performance you can look for a router with a faster cpu, or for a minipci-hardware-acceleration-module (I think soekris sell some with linux-support) and replace your wifi-module (if your router has a minipci-slot)

Of course if you want such throughput a 200 Mhz cpu is definitively not enough. Here the hardware ist the bottleneck, not openvpn. wl500gp has crypto hardware, but, afaik, no usable linux driver, see http://forum.openwrt.org/viewtopic.php?id=5032