We went the 2nd week in Dec 2009 and had a BLAST! From reading the boards, it felt the same way... "wow, its going to be packed!" It wasn't at all. They had free dining in 2009 and that did increaes the crowds some I'm sure, but we thought it was the best vacation EVER! If you pick the right parks each day, it will feel very empty. Sometimes we'd hop to a more crowded park for a parade, fantasmic, etc and even then you're not dealing with a summer mob. You'll love it.
We had so much fun that we booked again this year for the same week!!!
(side note: it was pop warner week in 2009 and is again in 2011 when we are there. barely noticed the groups in 2009. Again, pick the right park days and its awesome!)