Because of its supposed pagan origins, the Assembly did not celebrate Christmas. Here is the Assembly pamphlet on the subject written by Timothy Geftakys. The view Tim presents was the standard Plymouth Brethren teaching in the nineteenth and early twentieth centuries. (Many of the Brethren have changed their views in recent years.)
This pamphlet uses a passage in Jeremiah in a way that is common in the Assembly--there is no careful exegesis of the entire passage in context. Specific verses are chosen because they contain language that can be used to support a preconceived idea. Jeremiah was describing a common pagan practice of his time--the carving and adorning of a pagan idol, much like a tiki god.
Timothy's application of Galatians 4 to the celebration of Christmas is mistaken. Paul is talking about the struggle of the Galatians with works-based faith, and their reliance on keeping Jewish holy days as part of those works. If the first century church had been celebrating Christ's incarnation, the Apostle Paul would probably have agreed with it. His entire ministry focused on Christ.
Dave S. contributed a link to an article by Gene Edward Veith in World Magazine which gives some historical facts that clarify the issue and point to a different conclusion.