Christmas is coming, whether you like it or not. [Full disclosure: I don't like Xmas at all.] And this year, Christmas coincides with Chanukah. So in good news, I don't have to be annoyed at the "Oh yeah, happy Chanukah!" wishes two weeks after Chanukah ends. That's something, right?
There are many ways to handle this time of the year, but this is what I do. (Assuming I am visiting my family. If I'm not, Xmas is just another day. But I might get some awesome presents in the mail!)
Children seem to respond well to the analogy of family Christmas celebrations being like someone else's birthday party. You can to go to the party, help them celebrate, bring gifts for them, and you get really awesome party favors (gifts).
In a way, that's how I approach it. I don't join my family at church, but I can eat my kosher dinner while they eat their Xmas dinner. I get Chanukah presents from my family, but I also get Xmas presents. (I suspect they split their intended gifts in half, but I've never asked.) Very thoughtfully, they avoid using obviously-Xmas wrapping paper for my gifts. I also avoid Xmas-y wrapping paper on the gifts I wrap for my family.
Really, I feel like a spectator who occasionally interacts with the celebrations. However, my family of birth never took Xmas very seriously, but my Xmas-loving stepfamily entered my life when I was already the old age of 19. They take Christmas very seriously, and the Norman Rockwell experience is alien to me. In many ways, I think this makes it easier for me to take a back seat role in the house this time of year. I can lurk in the background without upsetting old family traditions because there aren't any traditions that involve me.
The key, in my opinion, is to set clear ground rules. Know what you are comfortable with, and don't compromise. If something makes you uncomfortable, be clear about it...without being a jerk. Be patient, explain clearly, and listen to whatever the reaction is. Acknowledge it respectfully, then move on.
So what's your plan?
Whatever you decide to do (if anything), now is the time to decide. Don't wait until December 20th to decide whether you will spend time with your Christmas-celebrating family members and what the "ground rules" for that time will be.
For more "holiday" reading, I suggest what I wrote last year: Chanukah: That Time of Year When Everyone Knows Something About Judaism.