There are really only two times a year that camera manufacturers drop prices on compact cameras: late winter/early spring and holiday shopping season. The latter is for current-year models, the former is for clearing out the prior year models.
The five cameras below are 2011 models (well, except for the LX5, though it got a major firmware update), picked for their features and photo quality in relation to their original and current price. These aren't necessarily inexpensive models; there's a difference between a cheap camera and one that offers you more for your dollar.
Canon, Panasonic, and Nikon seemed to have the best deals going right now. However, if none of these cameras interest you or you know a specific model you want from 2011, keep an eye on prices over the next few months. That's when retailers will start making more room for spring 2012 models.
Canon PowerShot Elph 510 HS
For those looking for an ultracompact camera who don't want to sacrifice a long zoom lens, the Elph 510 HS is perfect. You get a 12x, f3.4-5.9, 28-336mm lens, a 3.2-inch touch screen, and a 12-megapixel BSI CMOS sensor for faster performance and better low-light photos. It started out at $350, but now you can pick it up for around $250. Not bad considering it only hit stores in October 2011. Read the full review.
Nikon Coolpix S9100
With its replacement announced and on its way to stores, the S9100's price dropped $130 from its starting price to around $200. (One of our readers, pickles4901, said they grabbed one on eBay for $182 with an extra battery.) Read the full review.
Canon PowerShot SX40 HS
It looks like high-end megazooms are selling for only about $50 under their original prices (though Sony's HX100V is only around $20 less, which is ridiculous for a model that's approaching its one-year mark). My favorite in the category is Panasonic's FZ150, but at around $450 it's still pricey. Canon's SX40 HS is a more reasonable $380, packing an ultrawide-angle 35x zoom lens, a vari-angle LCD, plenty of shooting options, and excellent photo quality. Read the full review.
Panasonic Lumix DMC-LX5
The LX5 is what we call an enthusiast compact. It's basically a point-and-shoot, but with a larger imaging sensor, a better lens than most compacts, and manual control over shutter speed and aperture among other things. When it was announced back in July 2010, it was $499.95. It's now about $360, and that's after it got a significant firmware update improving autofocus performance and image quality. If you're after more creative control and better photo quality, this is certainly one to check out. Read the full review.
Panasonic Lumix DMC-GF3
For those who want to step up from a point-and-shoot, but don't want the bulk or look of a dSLR, the GF3 is an excellent option. It started out at $599.95 (with 14-42mm f3.5-5.6 lens) at the end of July 2011, but you can find it at Crutchfield for $380, which is the lowest price around for a current interchangeable lens camera. Despite the page saying it's for the body only, the site is including the 14-42mm lens. Read the full review.
Looking for specs and pricing? Compare this group of cameras head-to head.
Editors' note, February 16, 2012: I originally posted that the Canon PowerShot 510 HS was available for about $200. Unfortunately, that pricing was for the 500 HS, which is basically the ELPH version of Canon's enthusiast-targeted PowerShot S95. It's also a good camera for the money, but completely different than the 510 HS. I also added clarification on the GF3 pricing.