My Garmin Edge 500 had lag for displaying the grade. My Edge 530 seems to even have a tad more lag. And my son's Garmin Edge 1030 plus has about the same lag displaying grade. I've never worried too much about it. It's one of those gee whiz numbers that really doesn't mean anything that that specific moment. You just need to shift to what ever gear you need and keep pedaling.

I don't know, but I imagine part of the issue is that they are doing a running average for a certain number of polls of the barometric sensor in their calculations and also the algorithms that cancel out the "noisy" data probably play a part in that too.