Hi Kris,
I agree with a lot of the advice other posters have given. The holiday windows at Saks (50th & 5th) and Lord & Taylor (38th & 5th) are wonderful. The Rockefeller Center tree will be lit then. FAO Schwarz Toy Store is a favorite of both of my kids, although it may be crowded when you come. The Empire State Building is a must (if you like heights).
If you have any interest in seeing the Radio City Music Hall show, you could call their Christmas Hotline (212-307-1000) to see if there are any tickets left for the day you are in town. Tickets range from $36 to $100.
Another little known (& free) place to stop in is the public library on 53rd Street between 5th and 6th Avenues. On the second floor, in the children's section, they have the original Pooh, Piglet, Eeyore, and Kanga dolls. They look much different than the current Disney version, but my 6 year old was mesmerized when I took her.
Finally, there are fast food places everywhere, but if you would like a nice break from sight seeing that's not a McDonalds, Serendipity 3 Restaurant on 60th Street is a perennial favorite for kids. The front part is a little toy store and in the back they serve burgers, foot long hotdogs and their trademark "Frozen Hot Chocolate" ice cream dessert. I've even seen celebrities in there with their kids. Not sure if you'd need reservations for this time of year, but their number is 212-838-3531.
Have a wonderful time.