Should I out link? I've heard out linking is like leaking authority from my site... for FREE!! This is one of my favourite question at the moment, and i'm asked it many many times a week. Think about it there is nothing more natural thank Linking Out. Look at the Internet, think about if there was never any links... there would be no Internet. "the Internet consists of inter-linked hypertext documents and other resources". Without linking out it appears as though you have chosen to isolate yourself from the world.
If you read some of my other blogs you will notice my lack of concentration on authority. So tackling the next part of the question is a little harder for me. However, in my opinion a link is a way of allowing your readers to get more information on a particular subject. Looking a little further into this question I believe that if you link out, people will link to you but if your site / articles have zero links then people probably won't link to you. So you should LOL: Link Out Loud.
After my pages are "SEO'd" how long would it b before search engines re-index them?
Honestly there is no set time. It depends on your site and its attributes (internal and external). Generally it can take a few days but i've found for some sites it can be a few hours or it can be upto 6 weeks.
How effective can SEO be?
Again this isn't such an easy question. If your SEO is performed on a regular basis by someone whom is truly knowledgeable and not just someone who has read about SEO then the results can be very very dramatic. Not just in terms of visitors to your site but also in revenue from your site, if done correctly. If your site is SEO'd by someone not so "expert" then you are likely to find it has no effect, and in some cases can damage your seo.
How many keywords/phrases should I target?
This is another question that is hard to answer, not least because every page is different. I've found in some cases zero keywords is the best option, but in some cases upto 10 are required. As a general rule however, I suggest anywhere between 2 and 6 will help. Keywords / phrases are special little things, what you must do over time is play with them and find which keywords for which page best suit, any good SEO will be able to find a few good words for each page without much effort, but perfecting them takes time and expertise.
 - http://en.wikipedia.org/wiki/Internet