This is definitely a YMMV thing.
I'm in the "let it sit" camp. I have three manuscripts sitting right now, one I finished last September, one I finished in November, and a third I finished in April. I was writing stuff in between there that I wrote/edited/released in short order, but that's not normal for me. Usually I let things simmer.
Part of it is that I can't write one book and edit another at the same time (it's, like, mentally impossible for me to shift gears like that every day).
But mostly it's that taking a good long break from a book gives me that fresh perspective I need to look at it the way an outside editor would.
It allows me to read my draft like a reader coming to it for the very first time. I think it's important to have that phase of disconnection from a work. You've forgotten all about your 'darlings' and it's easier to stab them in the throat when needs be. You've forgotten the nuances, subplots, and character motivations, and it's easier to detect where they're lacking and how they need to be improved.
One other thing a long break allows, specifically if you're writing in a series, is retro-fitting. I don't plot out every book in advance, so I like going back to earlier books to seed for future books. Working on Book 3 in one of my series, I discovered that one of my subplots will come off stronger if a minor character who appears in the first few chapters of Book 1 makes a throwaway comment about Topic X, so I went back and added that in. That one sentence turned out to be a pretty big deal
