My husband and I are planning our 2nd trip to Universal during the holidays (Dec 28-Jan1st) and on our last trip in 2001 it was very busy, but doable. Maybe more so for us, because it was just the two of us, but I am sure even with kids, careful planning will make for a festive time there. There were many families there, and we really never waited very long for the rides, dining, etc.
What I enjoyed most about it was the decorations, holiday music playing throughout the parks, and we purchased tickets for the NYE event at Citywalk (adults only) , which was very nice, crowded, but nice. The worst part of the NYE event, was leaving. We waited over an hour for a cab to get back our hotel, (which is only 5 minutes away), and it was very chilly outside, and my husband had more than his share of champagne, so it was safer to wait, than walk. We are definitely going to have stragedy getting back to our hotel more quickly. What we realized was that, once the fireworks are over, the parks close...So anyone who is not attending the fesitivities at Citywalk, are going home, which means hundreds leaving at the same time.
We already have our airline tickets (I purchased those on Sunday), got a good rate with Expedia, of $210.00 pp, out of philly......We will be staying at the Holiday Inn Universal, which is where we stayed before, and had no complaints. It was very convenient to have a TGI fridays adjacent to the hotel, and they offer a good buffet breakast....
If you do decide to go, now is the time to start pricing everything, especially the airline tickets (if needed). They will sell quickly for that time of year. People advised me to wait until around May or June, but I thought the fare we got was good, and its one less thing I have to worry about.