Merry Nittel Nacht, Everybody!
So what would Jews do on Christmas Eve?
1) Tear toilet paper. I kid you not. Bear with me, as the reason is a bit convoluted: Observant Jews do not tear anything on the Sabbath as they consider it a form of "work." As such, they either don't use toilet paper on Saturdays (opting instead for pipe-clogging tissues) or pre-rip toilet paper before sundown on Friday. (I reluctantly confess, this is something I was exposed to while growing up the son of an Orthodox rabbi.) Since Jews were not allowed to study Torah on Christmas Eve, the rabbis still wanted the community to be doing something, um, productive. So they suggested people spend the time pre-ripping toilet paper for the entire year. I wish I was joking but, alas, I am not.
2) Play cards, play chess, spin a tiny top. Many synagogues held poker games on Christmas Eve; some say this is where the custom of spinning the dreidel on Hanukkah matured from, as a way for Jews to pass to the time.
3) Everything from managing finances to reading secular books to, get this, sewing. (That last one was actually a custom of the late Lubavitcher Rebbe, Rabbi Menachem Mendel Schneerson.)
It's obviously important to keep in mind that the often bizarre customs of Nittel Nacht were, as Rabbi Ari Enkin points out, "born out of political realities rather than theological ones. … Nittel Nacht comes to us from an era when relations between Jews and Christians, the Church and Judaism, could be described as 'tense' at best. We are fortunate to be living in a day and age where relations between these two groups have flourished immensely."