Are the prices of these digital photo frames always heading downwards? I want to buy some for family this Christmas, but don't know whether to wait until closer to ensure I don't over pay. What with the economy going pear-shaped, I've a feeling that things like this might start to get discounted, just to shift them?

yup - they are heading downwards.. ;-) the big supermarkets have thousands of these to shift at Christmas. They are already bought and paid for so they have to sell them - at almost any price.