Here is my PIO application process experience. I applied for my kid at New York embassy through Travisa Outsourcing. It was a smooth experience. Including the day I mailed the application, it took 12 business days to receive it. Below is the tracking status udpates provided by Travisa.
12/27/2012 10:21am EST Service order form completed online
01/10/2013 10:06am EST PIO application arrived in the mail at Travisa Outsourcing. Please allow Travisa Outsourcing up to 7 business days before the application status changes. Note that your application will undergo several steps before the status is updated.
01/10/2013 10:15am EST Application assigned for processing
01/11/2013 9:21am EST Order form and supporting documents received, payment processed
01/11/2013 5:15pm EST Documents prepared to go to Embassy.
01/14/2013 8:44am EST Documents dispatched from Travisa Outsourcing Office to Consulate
01/14/2013 2:32pm EST Documents received by Consulate
01/17/2013 2:00pm EST Pending approval of the Government of India
01/18/2013 11:23am EST Outsourcing office has verified the PIO is processed correctly. Waiting for mail courier pick up and is likely to be mailed out tomorrow.
01/18/2013 11:26am EST Passport mailed out. Please note that the tracking information may not be active for up to 1 business day.
The application when through "Pending approval of the Government of India" stage. When I searched the web, I found that most cases took 2+ weeks to get this approval, but thankfully it was approved with in one day in my case. There are some tips in this blog - http://kakadia.wordpress.com/2011/08/08/pio-card-how-to-apply/
The directions provided by Travisa are pretty thorough except for the below:
1) For the PIO card, they say they need four photographs but don't specify if four includes the two that need to be pasted in the application form. Just to be safe, I sent four in addition to the two on the application and they returned two back to me. So we need to paste two on the application and send two extra.
2) The thumb impressions are required at three different places on each application. One under the photograph and two on the last page of the application.
Getting the thumb impressions of a 2 month old was a challenge. Be prepare to have multiple copies of pages requiring the thumb impression available. The thumb impressions hardly match so dont worry if different impressions come out in different shapes. Make sure the impressions are within the box.
For mailing the package and return label, I created an account on FedEx website and created a shipment and used the "return shipment" option to print mailing and return labels. I used FedEx 2nd Day service. I sent everything in a bubble wrap FedEx envelope and provided the same for return shipment. When creating the return shipment, it is OK to use a date a week from application mailing date. I selected "drop-off at FedEx location" for package drop-off. Hope this helps. Good luck!