I think it depends on the kid. Our daughter actually hated her crib, so we wound up letting her sleep on her crib mattress on the floor starting around 12 months. Now she sleeps in this bed from IKEA, which (I think) is an awesome alternative to the traditional toddler bed:
She's been sleeping in it since she was 16 months old or so. I like it because it extends to a twin so grows with her and it is strong enough that I can sit on it and read her a story even when it is at the shortest length. The sides also serve as bed rails if you use the (thin) mattress that Ikea sells to go with it, so she doesn't fall out and it is close to the floor so she can climb in and out of it on her own. I think the main reason a lot of people keep their kids in cribs longer is that they don't want the kids climbing out of their beds in the middle of the night - our daughter never even tries to do this so I guess we're lucky.
As for timing the change, I would say either make the change a couple months before the baby comes or wait until a couple months after - the one thing you don't want to have happen is for your daughter to feel like the baby kicked her out of her crib.
Good luck - with the new baby too! Ours are 21 months apart and they play together great!