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I don't know if it's just my own misinformation, but I've always believed that if you kill an enemy wearing a hat, you have a higher chance of receiving his hat in the next drop. Does this have a ring of truth to it, or am I just full of baloney?

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No, this is a folk legend. There isn't any such mechanic in the item drop system. – user1306322 Apr 3 '14 at 11:31
up vote 20 down vote accepted

You may be thinking of the Ghastly Gibus- a Halloween themed top hat. This hat is given to a player when they dominate another player wearing a Gibus. The Pyrovision Goggles do the same thing.

The drop rates of other hats are not affected by who you kill.

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Thanks for adding the links. – Studoku Apr 2 '14 at 22:14

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