Yes, this is the busiest time of year at WDW, but we think it's one of the best times. Just make sure to plan carefully and don't expect to have short wait times at attractions. But there is so much going on (shows, storytellers, etc) that it more than makes up for the lines. We tend to get up early and hit the attractions we really want to do and then get out of the parks until evening when we either have a dinner reservation or a show to see. The one thing we learned not to do is go to the MK on Christmas day. We have a breakfast AR there at the Crystal Palace on Christmas morning but we will be going directly back to the resort following. Make sure you have AR's made if you want to eat at table service restaurants.
Hope you have a great time!