We have a real tree. When I was a kid we had real trees until my youngest sister came along and she was alergic to pine or somethin like that so for the last few years at home we had a fake tree. Since we live on alot of land we went into the woods and cut down alittle spruce tree, its only about 5' tall. The wife and I decided that we are going to get some seedlings from one of the catalogs and plant a few trees a year so we will have the 'fancy' Christmas trees. The wife also has her FFA and horticulture kids make wreaths to sell and all the extras come home so we always have a few around the house.
Another thing we do for Christmas when we have a party is we boil cinnamon sticks and some pine cuttings, it fills the house with the 'holiday scent'.