We are looking to rent a reasonably priced efficiency or condo unit in the Florida Keys for christmas and New Years week (2 week period).
The keys are a pretty big area -- do you want to be in Key Largo (mile marker 119) or Key West (mile marker 0). US highway 1 is the only road. Most places give their location by mile marker.
I live at mile marker 5 (just outside of Key West) so I'm partial to and know more about Key West.
My parents always stayed at sunrise suites,
http://www.sunrisekeywest.com/
They are 2 bedroom 2 bath condos with kitchen and living room and nice balcony. Located near the airport in Key West. They are about four miles from downtown and Duval Street. Duval is the center of old town Key West -shopping / nightlife / attractions / sunset celebration / etc. From this location, having a vehicle would be a plus. If you opt to stay in the old town area, you could get by without a car.
Christmas / NYE is the busiest time and of course the rates reflect that as well.
The Hyatt has four timeshare condo's here, two of them are downtown, one at the beach and one just as you get onto the island of Key West.
The Galleon is downtown at the harbor area - terrific location but the units are a little dated - my BIL and his family stayed there last October, I think their 'home' condo/timeshare is in Orlando and they traded weeks thru RCI.
Have fun planning your trip.