Yule, also known as the Winter Solstice, has so many traditions associated with it that there are entire books dedicated to this subject. Many of the customs will be quite familiar as they have been adopted by other religions into their practices, and that is how much of the tradition has survived.
Firstly, Yule, or the Winter Solstice, occurs when the Sun enters the sign Capricorn, and is at 0 ° Capricorn. Thus, Yule is a "minor" Sabbat because it is at zero degrees, the beginning of the energy. This is the longest night of the year, at the darkest time of the year. In ancient times, it was believed that the Sun needed our help to return, so the people would light bonfires both to strenghthen the Sun through sympathetic magic and also to show the Sun the way back to the earth. Lighted candles in windows and lights on houses and trees (Christmas tree lights) are the leftover symbols of these bonfires, and are meant to symbolize and aid the return of the Sun.
This was also a season of the year when the herds were culled, as there was only enough food to feed the strong and young who would be needed to breed in the spring. Weak cattle who may not survive the winter anyway were sacrificed, or just slaughtered, and used for feasting, or salted and saved. They were also traded, along with many other items, for this time of year, many people had time on their hands. The hunting was harder now because of the weather, and there was no agricultural concerns going on in the northern areas, so people had time to create and make things. The gifts that some of us still exchange at Yule originally were from trading what one had extra for what one lacked. During the Kalends in Rome, January 1-3, handmade gifts were exchanged, and this tradition also took place in Egypt at their new year, where people exhcanged scent bottles and scarabs for good luck in the coming year. We still exchange gifts at Yule, the only rule we adhere to is that they must be handmade - and I have always been the lucky recipient of the most excellent crafted things imaginable!
The main focus of most Yuletide celebrations is the rebirth of the Sun, as this is when the Goddess gives birth to the Sun in many traditions. In addition to the theme of birth, we also have the theme of death, symbolized by the Yule log. The ancient druids worshiped the Great Trees, symbolic of the Gods, and often sang or chanted to them and poured libations to them, as well as made other offerings. The custom of "wassailing" is a descendent of of the druids "wassailing" the trees. The word means to "wish good health to" and at one time was associated with many other holidays, not just this one. The Yule log is also "wassailed", being decorated with mistletoe, holly, ivy, red berries, and bright ribbons, and having libations poured over it, and also being sung to, especially while it is burning. The Yule log symbolized the sacrificed god, since the druids believed that only the sacrifice of a Great Tree was strong enough to bring back the Sun. In Rome, their Yule log was expected to burn during the entire 12 days of the Saturnalia, a mighty Tree indeed! Pieces of the Yule log were then kept to protect the home and family throughout the coming year, and also used to light the following years log. This is the last traces of the Perpetual Fire that was once kept in honor of many Gods and Goddesses.
Many of the older celebrations were extremely baudy and a time for regular hierarchies in society to be turned around. During the Saturnalia, for example, slaves were allowed freedom, there was cross-dressing between the sexes and also between the classes. Inhibitions and prohibitions were mostly lifted, and drunkeness and lascivity were allowed. This kind of behavior was associated with many of the traditions celebrated at the Winter Solstice, and even carried through to the Middle Ages. So much so, that the Puritans in England, and in New England, forbid the practice of Christmas, saying that it was a Pagan holiday, and would not allow it in their religion. The Christmas season, as we know it, with it's high emphasis on the birth of Christ, on family reunions, and on gift-giving, is largely a product of our American culture, and is only about 150 years old, if that.
As far as the birth of Christ is concerned, prior to 354 AD there was no official date for the birth of Jesus. However, the Mithraic religion, as Chritianity's closest rival, celebrated the birth of Mithras on Dec. 25th. Constantine, the Roman emperor at that time, and more or less converted to Chrisianity himself (though not actually baptized until he was on his death- bed), was being pressured by the Christian priests to ban this Pagan holiday. Contstantine was a pragmatic ruler, by all accounts, and he knew that the common people would either revolt, or celebrate it anyway. He therefore decreed that Dec. 25th was to be celebrated as the birth of Jesus. The observance of this date as Jesus' birthday was not actually accepted by Christians except in Rome. The Bible, and the early Christians, were much more interested in Christ's resurrection, as proof of immortality in Jesus, than in his birth.
Today, almost the only Christian sect to oppose celebrating Christmas is the Jehovah's Witnesses, who rightly recognize that the traditions carried out are totally Pagan in their origin. Especially the Christams tree, with it's garland, lights, and ornaments, has it's roots in the Druid worship of the Trees. The garland represents the circle of life, the never-ending cycles of the Goddess, and also the snake, which is a sacred animal to the Goddess. The lights, as discussed above, add energy to the Sun, and are an encouragement for the Sun's return. Glass balls were to reflect evil, thereby protecting against the "evil eye", and also to reflect the lights on the tree (originally candles on the tree) and increase the effectiveness of their light. Candy canes are a reminder of the renewal of all life as they are symbolic of the maypole, with their red and white colors, which stand for the blood and the milk of the Goddess, the ancient waters of life. Ti1nsel and icicles are fertility magic also, representing the rains which will come to fertilize the earth in the spring. Bells were used to purify the air, and to summon the friendly spirits for protection. The star at the top of the tree is our own pentagram, representing the four elements of air, earth, fire and water, overseen by Spirit.
Holly and Ivy were seen as the male and fenale principles (respectively) and were believed to bring good luck and fertility to men and women. Holly, berries, pine cones, and acorns were all used to signify the God aspect at this season, while the wreath symbolized the Goddess aspect. As a complete circle, the wreath symbolized the circle of life, the wheel of the year, and the sacred cycles of the Goddess, and was usually decorated with the holly, berries, ribbons, etc. of the God, and so combined both aspects in one decoration.
Of course, mistletoe has come down as the plant most associated with the Yule season. Being a parasite, it only grows high in trees, where the seeds land after being borne on the wind. The Druids therefore believed the plant was put there by the Gods, probably by lightning bolt, or put there by the Sun. It was believed to have miraculous healing powers, be very strong good luck, and have many other magical and mystical attributes, and thus was referred to as "the Golden Bough". In Scandanavian countries, enemies would often be reconciled underneath boughs containing mistletoe, and any contract thus made could never be broken. Thus comes our custom of kissing beneath the mistletoe.
There are many other customs from many cultures, as was mentioned earlier, and these are but a few. The Yuletide season was celebrated in almost every known civilization, and many traditions have survived in altered forms from many different cultures. Researching these customs is both informative and fascinating, and will enrich your knowledge and understanding of both your own Pagan roots, as well as the roots of other religions. The bibliography to follow is just a sampling of what is available on this subject...Enjoy!
"Green Egg" (Solstice Issues from different years) by Otter Zell
"West Country Wicca" by Rhiannon Ryall
"The Crafted Cup" by Shadwynn (presently out of print)
"Eight Sabbats for Witches" by Janet & Stewart Farrar