This comes with the Seasons Expansion Pack.
Sims can add holiday lights to the OUTSIDE of their homes. Click the front door of the Sim's own house, and lights are an option. It is automatic, you dont' get to place them yourself. They hang down from all roofs on your house so if your home has no roof, for example, a flat-roofed house where you put floor tiles on the top, you can't hang lights.
During the Winter, your Sim can throw a gift giving party in which a rug will appear with presents on it and all their guests will bring gifts to add to the pile on the rug. Then during the party everyone can open presents and each Sim will get something random. It seems that sometimes you will get objects related to the skill level, but it really is random.
But be warned, they need A LOT of floor space for the party to work right. The rug itself needs a clear 4x4 space that can't be blocked by ANYTHING, including ceiling lights. Then, your guests will need to be able to sit around the present pile so you need lots of chairs/couches around the clear space. If they can't find a place to sit they will try to sit on the floor near the pile but if there isn't much room they will all stand around waving their arms and complaining! There needs to be enough room for all the invited Sims to get in.
The pile of presents grows as arriving guests add their gifts and then once you start the open presents interaction they walk up to the pile one at a time and take something. The reactions are so funny. Sometimes they will love it and clap their hands and jump up and down. Sometimes they will hate it and react badly. A lot of times the hosting Sim will get more than one present.
The Christmas tree from the Store is in a set called More Holiday Presents or ComHolidayGiftsSet.Sims3.Pack