There are all kinds of settings for Christmas parties, from office potlucks to girls' night out, family gatherings to black tie affairs. Appropriate attire, then, can be anything from a cozy sweater and jeans to an evening gown or cocktail dress. If you're unsure, consider the time of day and the venue, or just ask the host what type of party it is.
A cute red Santa dress and hat may be fun for a gathering at home with a few friends and family members. It's delightfully festive and has its place in the season, but probably not anything you'll want to wear out on the town.