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First, go to the inn. You'll see two people dressed up in christmas costumes, that normally aren't there. Select the female (I guess the male works too, but I just never would type /kiss to a male char, be it player or NPC) and type /kiss. You'll receive either 5 Preserved Holly (changes your mount into a reindeer) or 5 Mistletoe (Can cast on a friendly unit, but not yourself, for a small spirit bonus). You'll get a one hour debuff that does nothing but prevent you from doing it again.
Yes, the male NPCs do the same. And yes I often have my male characters blow the male NPCs a kiss and both get hearts over their heads. I find if amusing.
Those NPCs will not give preserved holly. That is the quest reward for rescuing the reindeer. They might give out regular holly, which will eventually expire, but I only seem to get mistletoe.
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Then go visit Grandfather Winter who has a quest for you. He's next to the bank in Ironforge. I have no idea where to find him in Orgrimmar. Complete the cookie quest, which requires you to buy some stuff from the goblin NPC's as well, iirc. There's another quest close by about the missing reindeer, but that one takes you to a higher level zone (should be ok if you're around 40). The third quest is walking around half the city from one NPC to another with some book. Easy quest.
The cookie quest is the low level quest. Its fun to do and you get some food stuffs for a reward. Just don’t blow a gold buying the cookies from someone else. That rather defeats the fun of it.
The reindeer quest is, in my opinion, the hardest one to do as you have to pull several mobs in their low 40s, unless someone has cleared the way for you. This quest gets you about 500 goblin rep and 5 persevered holly, as well as an offer for more preserved holly via the machine behind the goblins for a cost of 5 gold.
The other quest given by the goblins is to save a shipment of food for the holiday. This will take you to the snow yeti above Southshore. You have to talk to a snowman there. He will then give you a quest to kill an elite yeti. The reward for this quest is a random holiday pattern. Later you’ll get a snowman kit in the mail that lets you turn into a snowman and it requires a snowball to use.
These is another NPC with a quest. In IF he is standing at the foot of the stairs near the wagon next to the bank. He will give you a quest that explains what the holiday is all about. It gives some nice IF reputation and takes all of two minutes to do once you know where to find the other NPCs.
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When Grandfather Winter takes his leave, the presents will stay around for a little longer, lootable if you did the quests, but they're level based.
The gifts under the tree can be opened whether or not you did any of the quests. Last year the call for gifts did not go out until about the 25th. The goblin has jumped the gun this year and it’s causing confusion. The gifts are indeed level restrictive. A level 60 will get to open several gifts. One or two of the mid range gifts were non-combat pets last year. These require a snowball to use. So if you get one be sure to save a few stacks of snowballs if you want to use the pet throughout the year.