We spent Christmas in Orlando in 2006 and would go at that time every year if I could
We flew over well before the main holidays, 11th December and stayed through to 27th December and rented a villa in Indian Creek (but it was a bit tired looking and ended up being sold shortly after, so not recommending it).
Having read everyones advice here we headed for the parks before the influx of US visitors and found the parks really quiet up to about the 20th/21st. No waiting at most rides and at that time Expedition Everest was the big new ride in Animal Kingdom so great to get on it without long waiting times. We did go back in for a last go on it on Christmas Eve and that park was incredibly busy - we got there for opening as we only wanted to do this ride and headed straight to it. Well the fast pass was already sold out until 1.30pm!! By the time we returned for our turn the Fast Pass was closed and there were people everywhere! Our advice would be to arrive before the main holiday rush and do the bulk of your parks/rides then. We didn't go to the parks on Christmas Day but did see signs mid morning saying it was closed as it had reached capacity (there was also a LOT of rain that day which didnt help) - mind you I think I would still like to be in Magic Kingdom on Christmas Day sometime (at capacity or not).
Another thing we love to do is go to each of the Disney hotels and see the Christmas decorations - the Gingerbread house in GF is fabulous! We actually had our Christmas Dinner in Citricos at the GF which I would highly recommend as it was one of the nicest meals ever!
We are thinking about trying to go again next Christmas but unfortunately the flight prices from the UK are really high so we will have to see.
Tracey