There are so many book possibilities out there, from The Grinch to Why the Chimes Rang and everything in between, that it's hard to decide on just one story. For whatever reason, the one that pops into my head most often at this time of year is Tomie DePaola's Merry Christmas Strega Nona.
It's hard to beat that magical old lady, her assistant Big Anthony, who always manages to screw something up, and of course the lovely Bambolona. I also remember thinking how, even though this story is set in Italy, the Norwegians I grew up with could relate to the baccala (which sounds an awful lot like lutefisk, emphasis on the awful). It's a lovely little story with a sweet lesson, and DePaola's drawings couldn't be more charming.
Looking for some other holiday-themed titles for kids? Check out the list Amber created, a retro suggestion from the New York Times, and some editor's picks from MacMillan (featuring a Gus and Grandpa book written by one of my husband's beloved grad school professors!).