Real trees that smell great. I sewed an extra-big square tree skirt some years ago, and it really does help catch the needles--you just sort of judiciously fold up the tree skirt and shake it clean outside. Replace before anyone touches the tree and makes it drop more.
Also, we've gotten fir trees ever since we were able to afford them. Fraser firs are the best, those things don't shed hardly at all. They aren't cheap though.
Had a neighbor growing up who kept her kids busy making "bird ornaments" over the holiday break: popcorn balls rolled in peanut butter, then in birdseed, stars made out of popsicle sticks spread with peanut butter and birdseed, odd-looking things made of cornshucks and millet sprays tied with twine (I'm guessing an eight-year-old's rendition of an angel?), strings of sliced apples and oranges. After they took the ornaments off the real tree, she'd have the kids decorate the tree again with the bird ornaments, and they put that out in the backyard.