I won't say "never, never go at Christmas", but here's our story...We were in WDW from December 21 until Jan 2. This was our third year in a row during this time (NY the last 2 years). We were really excited about spending 2 weeks there (haven't done that since 2000) BUT if we go again next year we will do just one week. The crowds at the park were unbelievable. And we found the CMs (not all, but more often than not) to be less-than-festive.
I won't say that this year was any worse than last year or the year before, crowd-wise, but personally, we're growing TIRED of not being able to move in the walkways at the parks during the holidays. Granted, we weren't trying to go "commando" so we NEVER arrived at park opening, but the wall-to-wall people just starts to grate on your nerves after a while. Of course, we used FP - and were often surprised at the short return times despite a packed park (like when AK was closed by 11:00 a.m. yet FP return time for Primeval Whirl was within an hour [maybe that has something to do with the ride being so far back in the park?]).
From our observations, it seemed like Christmas and NY brings lots of first-timers to WDW. This worked to our advantage since the BEAUTIFUL weather (high-70s the entire time w/not a drop of rain!) allowed us to swim every day in almost-empty pools (at BWV). It seems like first-timers don't want to waste their time at the pool when they can be in the parks!
Overall, if you really want to go at Xmas-NY, and want to visit parks, like everyone else says - you must get there early. It apparently is do-able, but for us, being
DVC members, we didn't feel we needed to "see it all" so we mostly swam. But again, the days we DID go to parks, it was very crowded.
And yes, we did make PSs (actually on the drive down on 12/20) for a few places, and got in where we wanted.
If I were to choose Christmas or NY week, I'd choose Christmas because it was the least crowded of the two weeks.