I am already planning on spending Christmas in Oaxaca again next year.
A truly wonderful experience. My 6th visit, but first time during the holicays. You can eat well for $15 a day per person. If you're willing to walk just a few blocks from the zocalo it's even less. The Marques De Valle is always by favorite place to stay. You must eat the grasshoppers! The tours arranged out of the Marques hotel travel agency are the best-max of 8 people on a tour.