Each Doctor has always given a higher age than the last time the age was stated, till Christopher mentioned to Rose that he'd been traveling 900 yrs without getting slapped by someone's mother, and she said 900 was a hell of an age difference. Suddenly he began referring to his age as 900 - which makes all the fans jump to the conclusion that as well as being war damaged, he was anxious to avoid appearing over a thousand years, and thus put more of a damper on Rose's potential interest <g> or sometimes we put it to a second midlife crisis, stuck on "39 and holding". David has used the 900+ numbers quite often in his early days as well as up to the end, so we can see it's meant as an overall age figure, not a single incarnation figure ... but he has whittled the figure down even as we watched - he had appromiately 4-6yrs adventure between 900 and declaring himself 903, for example <g> and doesn't seem to be able to help himself - even when talking to Wilf!
As for how long each incarnation appears, it seems a few hundred is a likely span - he was 300 or so when his first body wore out, and he'd been in his 7th Sylvester form for a few centures as they went to the trouble of showing off his gray temples in the movie. The Doctor once said something about how timelords dont age, they regenerate ... but I think they do age, just very very slowly, a century equalling a year perhaps, and someone in the Doctor's lifestyle will end up regenerating before it could normally be noticed.
Donna commented on the Doctor looking older, I believe .. but I think she meant more of his expression .. tho perhaps the writers were alluding to his time with the Master left him slightly older in form when he was restored, as well as the wear and tear on his emotional self. But as neither of those really have much to do with his age, ... nevermind.
And .... it always seemed to me it was meant to be Earth years. Right along with the fact that they were always speaking English, the figures seemed to translate to the viewers in the same way, Earth years unless otherwise stated. The way the age kept moving up no matter who he gave his age to, seemed to make it all make sense.