WATCHOUT as application does not really add any latency. However, latency might come from the interface between WATCHOUT and the hardware.
WATCHOUT only supports DirectShow, so if you are comparing WATCHOUT to another software then make sure that you are comparing using the same framework.
A test is to install the 32-bit version of Media Player Classic Home Cinema because it more or less use the identical DirectShow filter graph as WATCHOUT.
What normally adds latency is re-sampling of any kind like color format re-sampling, color space re-sampling, framerate re-sampling or resolution re-sampling. Especially if the hardware doesn't have these capabilities then the conversion takes place in software. WATCHOUT is capturing using the YUV 4:2:2 8-bit (YUV2) format in the resolution and refresh rate that is specified in WATCHOUT for the live video media.
Getting the frame from DirectShow and showing it on the screen usually takes two display frames due to double buffering. So, if you are running the displays at 60 Hz then WATCHOUT will add around 33 ms. All other latency comes from the DirectShow capture filter and capture hardware. Most hi-end hardware adds around one frame when not re-sampling etc. So in most cases it should take 3-4 frames from capture to display. Some hardware have low latency modes which makes it possible to capture in less than one frame time (example: Datapath livestream) which results in a 2-3 frames capture to display latency.