Raising the Christmas tree is a custom which originated in Germany, but in Mediterranean countries they're all about the nativity scene. This is the traditional model representing the birth of Jesus as the story is told in the Gospels according to Matthew and Luke – kind of like a Jesus diorama.
Constructing a nativity scene can be traced back to St. Francis of Assisi (1181/82-1226). In Italy the nativity scene is called il presepe or il presepio, and the southern city of Naples is the most renown for its presepi featuring detailed figurines handmade and painted by local artisans. The more elaborate nativity displays include not only the holy family in the manger/ grotto, the animals, shepherds, angels and the three kings/wise men/magi but also the entire "little town of Bethlehem." Less traditional nativity displays might include contemporary political figures and other celebrities along side the good people of Bethlehem, and it probably won't surprise you to hear that this Christmas the most popular new additions are Barack and Michelle Obama.
In Catalonia (incidentally, I can't mention Catalonia without think about what my friend D said about Catalan "Hey let's take some French and mix it up with some Spanish and then be assholes about it"), there is another traditional figurine included in the nativity scene: el caganer. The caganer is a little guy who is caught hiding somewhere in the display squatting with his pants down, answering the call of nature al fresco. It might sound vulgar, but the caganer is so entwined with local culture in Catalonia that there were protests in 2005 when Barcelona didn't include one in the city nativity display. This all makes me think of the juxtaposition of the sacred and profane in medieval mystery plays (e.g. plays about Noah's ark which include Mrs. Noah boxing her husband's ears, or plays about the birth of Jesus which include Mac the sheep-stealer and his wife Gill). The defecating figurine is traditionally depicted as a Catalan peasant wearing a red stocking cap, but there are also more modern caganers bearing the likeness of public figures such as King Juan Carlos II, Pope Benedict or W at their most humble. And yes, now they have Obama caganers as well!
Speaking of Christmas displays, does anyone remember how Lakeside mall in Metairie had a post-Katrina Christmas village in 2005? Houses had blue tarps on their roofs and spray-painted messages from rescue workers on their walls, and there were junked refrigerators on the lawns and military vehicles on the street. Here are some photos. I think some people found the hurricane ravaged Christmas village to be a disturbing reminder whereas others thought the idea of the little villagers sharing in their plight was comforting or amusing.