I have often gone the week before Christmans and just love it. DL is so lovely and especially magical at this time of year. It gets crowded as soon as the schools let out for Christmas break (probably 12/15 this year), and generally get more and more crowded as you get closer to Christmas. I've always heard it is even more crowded after Christmas, so I've avoided that week.
If you are thinking of staying onsight, I would wait --- but not too long. Last year, Disney offered a 4th night free at any of the Disney hotels. The promo package and the off-season rates were available for arrivals up to the 18th or so. I believe the promo packages became available mid summer; I think we booked around late August, and the promotional rates were going fast. If you can book through
AAA, that is another good option if you are staying on-sight. They offer the same promotions that Disney offers (since they book through Disney travel), plus they provide the enhanced FP if you stay onsight -- a great perk during busy periods.
I absolutely love Haunted Mansion Holiday, but there were rumors last year that it might be the last year. I think Disney has to purchase rights from Tim Burton every year. Small World is spectacular at the holidays, and Storybook canals is very cute.
There are now many good restaurants at the DLR worth trying. Blue Bayou is unique, and the best restaurant inside of DL. DTD, DCA, and the hotels all have nice places. Keep reading the boards for recommendations.