Each pixel has a count. Each tile gets a 90 percentile value. Every corner gets the average of its 4 tiles. Every pixel in the currently requested tile gets a value [0, 1] based on the bi-linearly interpolated "max". It's then colored based on that final value.

Maybe unnecessarily complicated, but it does provide really good local normalization. You also get cool looking shading like in this location http://labs.strava.com/heatmap/#16/-121.76487/38.49134/gray/...

It looks like it's losing a lot of dynamic range when you zoom in to a specific road and it's all completely pink (or whatever the hottest color is depending on the chosen theme).

This is very interesting. thanks! I would love to know about the whole setup in detail. nudge

(edit: Your color scales are not really intuitive, I have no idea what red or blue means or red vs green.)