Whenever the Doctor and Master met they recognised each other, even if they had regenerated

So why didn't the Doctor recognise Missy as the Master?

Or have I missed something?

Because he has a vagina.

He did. It was totally clear from the Doctor's reaction when he first met her that he knew she was a Timelord. And I think he had an inkling as to who she was. He just needed it to be confirmed from her.

The Doctor has always been notoriously terrible at seeing through the Master's disguises, especially when he isn't expecting it.

He was definitely off his game, it took him far longer than usual to pick up on the two-hearts thing and the Cybermen.

Wasn't that just from the point that she put his hand on her chest, so that he could feel the two hearts? Rather than just 'knowing'?

For all that the Doctor originally boasted that he would 'know' if there were any Time Lords out there, there have been many cases where he really should know, and doesn't. The Fifth not recognising the Tenth in Time Crash, The Eleventh not knowing if there were Time Lords living in the bubble universe of The Doctor's Wife, and so on.

And no, you haven't missed anything. Knowing that Missy claims to be the Master is the only thing anyone knows. We might need to ask the question again after Saturday.

Maybe his claim was just that: a boast. As you say, it's never actually been shown to be true. He didn't recognize the Meddling Monk as a Time Lord either.

Or K'Anpo Rimpoche.

Personally, I think that the Doctor is nowhere near as good a Time Lord spotter as he thinks he is!

When he and Drax met up Drax knew who the Doctor was straight away (even though the Doctor had regenerated three times since they last met) while the Doctor had to be prompted several times to remember who Drax was.

So basically he's rubbish :P Maybe he has a sort of dyslexia when it comes to Time Lords. Maybe it's why they thought he'd 'never be a Time Lord'.

what's the chances of this Mistress character appearing in a lengthier storyline/series than the previous Simm incarnation?

she's not as "famous" as John Simm, so presumably she could be contracted for episodes across multiple series (say 3 or 4 seasons) so we get a more consistent face to the enemy for the Doctor to have as well as the mainstays of the Daleks/Cybermen and even the Angels?

I would not object one bit to the Master/Mistress appearing in mid-season one-off episodes, rather than always having to be the grand, end-of-season boss. The Daleks are the Doctor's nemeses as well, and they aren't always the ultimate foe.