Domain age weighting

I've had a quick search for this but no real luck, I'm hoping someone has the answers.

Basically, I'm interested in how important domain age is to Google. I know G likes old sites, but how does that balance against good copy, good use of tags and high quality backlinks?

I've got a domain that was registered in 2006 that I'm about to start optimising, which I think is quite a good foundation. I've been looking around at the competition and for one of my keywords the site that ranks top has very few backlinks (according to YSE 68 to the homepage [which is what's showing in the SERPs] and 94 overall - I've had a look through a few and they're not all in the same niche and they don't seem to have high PR) and has very poor on page optimisation for the term, but it was registered in 2000 which I presume is giving it an edge.

There are other sites on the top page that to me look better optimised and have got better links, but they all seem to have been created within the last couple of years.

How much extra work generally has to be done to overcome that age benefit?

Old domains are amazing to work with. Google doesnt really like new sites, it give new sites a boost and puts them high up in listings, but then just erases them after.

So a 2006 domain is good to work with, you will end up doing less work than you would of had to with a 2009 domain for example.

So just do some of the basic SEO methods and you should be #1 or #2 if you do it all correct.

May i ask what niche is this?