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I saw that Canon carries some refurbished cameras. Anyone have any experience buying a refurb direct from Canon? Are these cameras restored to like-new condition and functionality? Any thoughts?

I bought several factory refurbs from Canon and all had to be sent back for various problems.  Those were 10Ds and a 20D though, so maybe their refurbishing process has improved since then.

In the past I considered buying a refurbished camera, but after having to send in a new lens for repair after buying it and it came back with the same problems....well I question rather they actually do any repairs if the problem is minor. So you don't really know what you're getting.

I would happily buy a refurbished camera if it saved me a significant amount of money.. say 30% or so.  The camera should be as good as new.. or better since if anything was initially built weak on the camera it should have broken already and gotten fixed.  I bought a new 5Dmark II and had to send it back for repair - no big deal, I used my back-up and had my back-up-back-up as my second camera

I guess my point is that if you buy new you are not guaranteed that it is going to work more flawlessly than buying a refurbished camera.  Things can go wrong with any camera and on both cameras you should have warranty so I would go with the cheaper of the two.

This computer I'm typing on was a refurbished machine

So I ended up getting a Canon T2i, new instead of refurb just because I had this fear that a refurb would be defective. Sure enough, the brand new T2i I bought was defective straight out of the box. The on/off switch is busted and the camera only stays on when you apply a good amount of constant pressure to the switch with your thumb. Let off the switch and the camera shuts down.

I guess it just goes to show that new or refurb, you can still get a dud.

^^^  Gostwycks point is spot on. A relationship with a good camera shop is essential to running a photography business. Over the years, you will save far more than the difference between internet sales and camera store prices.  Also, before buying a refurbished camera, i would look at the used camera/trade in market. The amazing thing about digital equipment is how short in time the effective value of a camera remains near it's purchase price. In NYC, there are quite a few stores that resell used digital equipment at a hefty discount. These are last year's " greatest breakthrough ever" cameras that are suddenly surpassed by this year's " this one is better than ever" cameras. Depending on the specs you require, and how well the camera has been cared for, you can get a really good deal. The trick is that you have to find a dealer that you can trust, and you have to be able to test it out before buying it. I would NOT buy used equipment from ebay, or a particularly well known huge camera store in NY, btw. The problem with refurbished is that you really don't get enough of a discount to warrant the chance you take. I've got a Leaf back for my MamiyaRZ that sold new for $21,000. Two years after it came out ( and was replaced by a higher megapixel version), I bought it for $3,000. This is not the camera for microstock, but it illustrates the huge haircut used digital equipment takes when the newer, greater stuff comes out. Just a thought of something to consider.
   

Good point. There's local, and there's local-ish. Where i work now is about an hour and a half from NY, but i travel there to buy equipment. Once you establish the relationship, it works just as well by phone, but finding that good dealer is a bit of a trick, I'll admit.

I'm in the same boat.  No local camera stores in my entire county, if you don't count Wolf at the Mall.  Which I don't.  They aren't really local, and they know absolutely nothing about cameras.  I have been in there a number of times and heard the sales people misinforming customers.  I don't bother going back there now. 

I would rather buy from B&H or Adorama, where you get personal service even if they aren't local for you.

Indeed.  Apparently not that complete, at least on the ones I tried out.

Consider this - if someone returns a camera but doesn't say why, those issues may not be noticeable on a camera inspection, unless the tech knew what to look for.  In the case of the problems I had, one camera sensor had a cluster of dead pixels that was very obvious at 100%, one had a flash that would overexpose to the point where everything went white, but only intermittently, and the last had a slight backfocus.  None of those types of problems would show up on a brief inspection.  

I worked for years in electronic test and repair. In fact, not to boast but I designed test systems.  You're basically correct in what you say.  When a product is returned the manufacturer is to some extent at the mercy of the customer.  If the problem isn't obvious or consistent, and the owner didn't provide a useful description or a way to reproduce the failure, the manufacturer can only mark the ticket CNC (can not confirm), and send it through the usual outgoing test process.  And there are  limits on that process, because you can only spend so much time on one unit.   If it passes that process it's "as good" as a new unit, and covered by the same (or similar) warranty.  

If the customer reported, for example, that the product failed only after being on for an hour, or only at high temperatures, or only when shaken in a certain way, then a good technician can do more in hopes of reproducing and diagnosing the problem.

Many times what happens is that the information provided at the time of the return is lost - maybe it wasn't written down by the dealer, or a paper note from the customer was lost along the way, or (today) a language barrier intervenes.  The language problem is severe in today's multinationals and is usually swept under the rug; but if a technician doesn't speak English, and the problem description is in English, well there you are.

BTW a cluster of dead pixels could be easily detected in an automated test.  Remember, these cameras have software control interfaces.  A test program could take a picture of a pattern, or pure white, or pure black, and scan the resulting image for anomalies.  Disappointing that Canon let that through. I certainly hope the dead pixel count wasn't inside some "acceptable limit".