I feel like chiming in on this, though the other entries cover most ideas associated with Christmas, I feel as though the latter portion of Hai-Etlik's contribution deserves a response. While, Christmas is conveniently placed to offset winter solstice celebrations, its origins may actually lie with the Late Antiquity idea that famous and great people die on the day of their conception. And who is more great and famous than the Son of God?
Thus by the logic of the ancient Mediterranean, Jesus must have been conceived on the same date as His crucifixion. The problem arises in that, by the time the early Church was trying to figure this out (late 2nd-early 3rd century C.E.), the exact date of Jesus' death had passed from memory, and since the Passover (and thus the date to determine Easter) was not fixed in relation to the Roman calendar, a clever solution was devised. Pick a Passover around the time that it was thought that he was crucified and extrapolate. Thus, the Feast of the Annunciation became March 25.
At this point you may be asking, "Why is this important?" Well, first of all the Feast of the Annunciation is important, because it and its cycle of stories occupy a much more prominent place in the Gospels (and the early Church tradition) than the Nativity, because the recall that the patristic writings and creeds, while focused on the Incarnation (among other things theological), don't get into the details of Jesus' birthplace and date, so much as they get into 'concieved by the power of the Holy Spirit and the Virgin Mary.' Second, the Annunciation, and the associated stories of John the Baptist and the Blessed Virgin Mary, contain alot of liturgical material that has been used since at least the time of Hippolytus and his Apostolic Tradition (an early Eucharistic liturgy), such as the Magnificat and the Song of Zechariah, in addition to all the prefiguring texts from Isaiah. So, that's why we go to all the trouble of figuring out the Annunciation first. After that, it's just math to figure out the date of the Nativity. Of course, while there are cases of the Nativity being celebrated rather shortly after the Annunciation became widespread (especially in North Africa), it wasn't until around the time that the Roman emperors tried to unite all the winter solstice festivals into one gigantic multi-week state-sponsored festival of "The Undying Sun (i.e. the emperor)" (bread and circuses, bread and circuses my friends...) that Christmas became widespread. However, the cause and effect isn't clear since the chronology isn't entirely clear. It may be that 'The Undying Sun' was a response to Christianity (and other religions) who were taking the luster out of Saturnalia. Or, it could be the other way around, in that a relatively minor Christian feast was elevated (see Hanukah) to meet the cultural challenge. In either case, Christmas as a counter-cultural event began to die out with Constantianism, and was finally killed off by the 19th century and the rise of commercialism.
But that's another story.