I think the answer to this is "Yes"!
Recently, I was looking for some real estate related .ca domains for Canadian cities. Where I look up domains, at NetCheap.com, you can see many extensions in the results (.com, .net, .info, .biz, .ca and so on).
For fun, I started checking pure city names, and found that NorthVancouver.biz and PortMoody.info were available. These are cities close to Vancouver with 100k and 30k populations, respectively. I know .biz isn't great, but for a city name it's worth the reg fee. And .info is a great extension for information type domains (check Spain.info for example).
Also, checking for Whistler domains because the Winter Olympics are there in 2010, and lots of people will be searching for Whistler information, I saw that WhistlerSkiing.net was available (and other top extensions taken). Again, this is a high search term for Whistler, and very applicable because Whistler is known for it's skiing.
So don't give up on fresh regging, you might still find some gems out there!