I'm ready to put in a tankless water heater. Thing is, it still takes forever to get the hot water to my shower. Do the water recirculation pumps really work for retrofits? And do you end up wasting money on water heating if you use them?

The reason for the time it takes to heat up at the faucet in the shower is that the lenght of run to the shower. Codes require if the point of use is more then 100 feet, (and some can correct me on this length) a circulation system is requred.

To answer your question. These systems work with a temp control near the point of use. Once the thermostat sees the warm water it turns off the pump. But yes they do cost money to use and can waste lots of money running on and off. But so does wasting water waiting for the hot water to arrive.
Do not forget you need to run another pipe from the bath area back to the hot water heater and if your located on the 2nd floor of the home it is quite difficult to do.