Is there a "best" time of year to buy a digital camera?

Last year the best buys on cameras were just before Christmas.
There were some large discounts available.

There is not much drop in prices when a new camera comes out.
Sometimes you will see a rebate from the camera manufacturer, a few months before a new camera comes out. Apparently this is to deplete the present stock before the new camera hits the stores.

The big department stores usually stop buying before a new camera comes out and are sold out by the time the new camera is available.
You can sometimes pick up a "display" model at individual stores at a discount.

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If you want to buy high-end big ticket items that hardly go on sale (and wants to save a bug or two), Canon usually has two rebates each year. The bigger rebate is the fall rebate that usually runs from mid Oct to mid Jan, and usually has double rebates and a bigger inventory of products included in the rebate program. The other is the spring rebate that usually runs from April to July. This year is a little different, the fall rebate got extended to feb and the spring rebate just got started on 5/17. But at least now Canon has instant rebate, so that we don't have to bother with the annoying mail-in rebates. These rebates vary in amount, but usually not anything impressive. But if you buy an expensive D-SLR camera with an expensive lens (or a couple of expensive lenses), then you can potentially save hundreds with the double rebates, after you shell out thousands.

Other manufacturers have similar rebate programs too.

For the lower-end cameras, you probably can find better deals in after-Thanksgiving and Christmas sales. And if you don't mind buying soon-to-be outdated models, some vendors have great close-out sales.