1. I think so many teachers get stressed out because there will be "adults" present. It's one thing to sing in front of children. It's another to sing in front of adults! So remember that parents will be totally focused on their children, and will be covered in that magic parent fairy dust that makes us ga-ga over our own little angels (and that's as it should be- we're designed that way!).
2.Don't over-rehearse! Children are spontaneous, and the best thing to do is choose a simple song and sing it as few times as you have to for them to learn it.
3. Simple props can make all the difference! A pair of reindeer antlers, a paper star or crown give children comfort and look sooooooooo adorable in the inevitable videos!
4. In regards to number 3, remember SIMPLE prop! Don't get stressed spending all of your time making elaborate props for the chidlren's minute of glory. You need time to rest up and put up your feet for a while!
5. Finally, remember that some children don't do well with the stress of suddenly being "on stage," often in a room they aren't familiar with. Let parents know ahead of time that it's okay for them to join their child during the presentation. It's no fun to see a crying child reaching for his or her parent, and although these little performances are great and offer many mini lessons for children, the ultimate goal should be the comfort level of the child. So communicate this with the parents before the program, and make sure they know their presence with their child is welcome.
Of course, don't forget my website has lots of simple songs for the holidays (all winter holidays, not just Christmas!) that work great for performances. Click on link to see a playlist of free downloadable holiday songs http://www.nancymusic.com/playlists.htm
Now go out there and deck the halls with songs!