In early December 2009 I attended a party and was a little biased after attended two years previous the Halloween party. I somehow like the Halloween party better, at both Disneyworld and Disneyland, but that is just me.
But I thoroughly enjoyed myself at the Christmas party. A week before my trip I was walking in snow and 19F but during the Magic Kingdom Christmas party, I was in shorts, a Santa cap and a wool Christmas sweater. And it was 82 and muggy.
Just like the Halloween party, the Christmas party has its treats - from an exclusive Christmas-themed Wishes fireworks show, a night time look at the Disney Christmas Day parade, the castle icicle lights display and the show that kicks off the special evening.
Just like during the not so scary Halloween party, some of the characters dress up during Christmas party nights. The sugar cookies, hot apple cider and hot chocolate are a treat, but when I attended it was 82, muggy and with an onset of fog, which added a real cool effect to the castle icicle lights. The hot chocolate was a little too hot. My mind preferred an ice mocha or iced Americano.
Just like the Halloween party, the Christmas party is a separate ticket event. There is a limited number, but not so that the night is jammed with park guests.
The crowds tend to thin after the fireworks show after the first parade during both holiday parties, but that is my observation. If you time things right around the exclusive night parade, most of the rides are practically walk-ons.
I suggest you go and try it out. Doesn't hurt to try something once.
On a side-note I suggest you watch Mickey's Jammin Jolly Holly (???) Christmas parade at Animal Kingdom. It's a very cool overlay of the regular parade. You can smell chocolate from Minnie's flat and the snow is quite impressive from Donald's float.