I'm going to make some stuffed felt decorations ... tree, bell, star shaped. Just cut out 2 shapes blanket stitch around 3/4 of it with embroidery floss, stuff it, then embroider the last 1/4 to hold everything together. If I feel like getting really fancy, I might sew on some sequins or ribbons to jazz things up.

Oh, and not for the Christmas tree, but I'm going to make some bunting out of Christmas fabric .. .you know, those hanging decorations made up of triangles sewn onto a ribbon or piece of bias binding along the top.