I have vague memories of a TV movie from the late nineties about a sentient Christmas decoration. It was called something like "the Littlest Christmas Ball." In terms of plot, I have nothing, but I think it took place largely on a Christmas tree and there might have been an angel ornament.
I'm pretty sure the movie you're thinking of is Noel. I was looking for something extremely similar and that's what I found. You can watch it here: http://www.youtube.com/watch?v=tb96EAYgNC8