When is "Y" a vowel?

In school we are taught the vowels: A, E, I, O, U, and sometimes Y.

Today's XKCD got me thinking about when the letter Y is considered to be a vowel. I understand (perhaps incorrectly) that in words like bicycle and why it is a vowel. What about the word voyeur (as mentioned in the XKCD alt-text)?

If I've got this backwards, and Y is almost always a vowel, how can I tell when it is a consonant? Thinking back, I don't think my education ever covered the difference between them, we just memorized which letters were which.

Answer

The answer is that it depends on what purpose you have in assigning it, or what set of rules you are following.

From the point of view of phonetics, the first thing to realise is that letters are not vowels or consonants: they represent sounds which may be vowels or consonants (and in the case of "y" possibly both).

The next point is that bifurcation into vowels and consonants is too simple: phoneticians recognise other possibilities such as "semivowel" — which "y" often is.

It is clear that in "Yvonne" and "mystery" all the "y"s represent vowel sounds.

I would say that in "yacht" and "Yeltsin" they represent semivowels (which you can call consonants if you like.)

I would disagree strongly with decoz.com (quoted in Mehper's answer) about "Kay" and "Sydney" — I think it is preposterous to say that "y" is representing a consonant in those. In the case of "Sydney", it is part of a way of writing a simple vowel sound; in "Kay" it is part of a way of writing a long vowel sound or a diphthong, depending on dialect. (A diphthong consists of two vowels or a vowel and a semivowel depending on how you want to analyse it).