Time-dependent phenomena related to the reaction of ultrathin films of Pd deposited on SnO2 (110) surfaces of differing oxygen content have been investigated. Conductance measurements and x-ray photoemission spectroscopy (XPS) were used to characterize changes occurring on the surface over a range of metal coverage. Conductance effects included a rapid change immediately following a deposition and a much slower relaxation over a time scale of 1000 s. On the oxygen-rich surface, prepared by oxygen plasma treatment, only one relaxation process is observed for all coverages of Pd below 5 monolayer-equivalents (MLE). On the nearly stoichiometric surface, prepared by thermal oxidation, the conductivity exhibits a conversion from one type of relaxation to another of opposite sign near 1 MLE coverage of Pd. The results are interpreted using a model that includes oxidation of metal species, formation and charging of surface states, and the effects of overlapping depletion regions that result from the Schottky barriers formed around each metal cluster.