We took my sister, her husand and our nephew to VB over Christmas Week in 2001. Here's what we came up with:
1) VB is a lot saner than WDW during this week.
2) We had no problems reserving a 2BR somewhere between 11 and 7 months out (our primary home is VB).
3) The weather for us was warm enough Christmas day that we went pool swimming, but as mentioned, the weather that time of year can vary drastically. Still, on the chillier days, there were some kids in the pool turning blue.
4) The level of activities is probably alot lower than during the 'warmer' months. There was nothing going on in the nature trail area for example. But that means you can go exploring in peace.
5) There was almost always something going on during the day activity-wise. The variety was such that it would appeal to kids of different ages, if not all ages. At night, they offered star gazing, but it was extremely overcast when we went.
6) Other than decorations, a candy treat bag on the door knob Christmas eve, and Santa Goofy, they really didn't do much Christmassy stuff. Even the 'caroling around the campfire' was kinda lame as the CM's didn't know many carols...lots of songs we'd never heard, but very few carols.
7) Dinner at Sonia's was a big disapointment. I don't have time ot go into detail, but it wasn't anything different than dinner at any other time of year...I'd have rather cooked all day.
You don't mention how old the kids are...odds are there is something for them to do. After all, even without 'planned' activities, most kids wind up making their own fun if given the chance.
Hope this helps,
Joe
Christmas is a popular time at Vero but you never know until you make the call about availability. I'm sure the resort runs all kinds of activities for the kids as they do year-round. 
