I figure Christmas gifts are for frivolous things I wouldn't buy myself. Sure, I need a new winter jacket and some winter boots...but I will bye those for myself anyway.
My wife and I do this - no real "need" stuff - just more or less fun stuff or "stuff we could use but for some reason, won't buy". We also spoil each other quite a bit. I'll be sure to get some Blu Rays, some DVD box sets, an X-Box or PS3 game or two (I think Resistance 2 is in the mix), other stuff.
For her, I got her a really nice dock / speaker system for her new iPod, some games for her handhelds (she has a DS and a PSP), a nice cosmetics case (she, being disorganized, uses tupperware now), and I made her a really nice "girl's tool kit" (not a cheap "all in one set", but one where I picked each piece. She'll really like this, as this is something she'd never buy herself.) Got her a few books too, an iTunes gift card, and some other stuff. Pretty sure she'll be happy
Christmas is fun!!