Just about the only thing that I can estimate correctly these days is brewing a batch of beer. 4.5 hours from start to finish including cleanup, and 3 weeks later I get to enjoy it...

As for everything else, like many of the other posters have mentioned I believe the fact that we underestimate because we're either a) too optimistic or b) don't take into account all of the things that really need completed. For me it's typically a bit of both, and it's something I'm constantly striving to better myself with.

-Luke.