Years ago, my observation on this phenomenon (which may be totally wrong) was that the seasonality had to do with the school year and the weather itself. There were more transactions once school ended and right before it started than during the school year. The types of homes transacted during this time also was more kid-friendly, obviously families with more children had a greater desire to avoid disruption of their kid's schooling. The weather played a similar role in that fewer people in areas where snow is common want to risk moving in the midst of a storm.
I suppose to directly answer your question - the better time to buy is when others aren't out looking. That's the time there are fewer sellers as well, so this may cancel itself out, but you may find a winter seller needing to move and feeling under pressure to do so.
Given the current state of the economy, the number of foreclosures out there, I'm not sure the seasonal effect would gain you much.