Once we started having children, my siblings and I stopped exchanging gifts and just bought for the kids. But once the kids got to a certain age, they were so picky that we were forced to ask their parents for specific gift suggestions. However, it soon became apparent that the kids didn't appreciate the gifts because they knew that they'd get them one way or another, either from us or their parents. Also, sometimes we'd miscommunicate, and the kids would get duplicates.
So I started giving gift cards. However, I discovered that my nephews weren't even using the gift cards I gave them -- they were letting them expire!. The money meant nothing to them because they get everything they want from their parents. So I have announced that we're not exchanging gifts this year. It's really sad that it has come to this, but we all are just over-indulged.
One exception: I know that college students and young adults just starting out on their own *really* appreciate cash. But my nephews aren't at that stage yet, so I don't expect anyone to give my college student a gift.
I always give my Mom a gift (she likes clothes) just because she's from a different generation that is not spoiled rotten like my generation and our children.
As far as friends go, we all have all of the "stuff" we need, so my daughter and I make a homemade food gifts for them.
My husband and I have too much stuff, so we just buy each other some token gift to put under the tree. The TV in the master bathroom died, so we'll buy a flat panel (but we would have bought that anyhow, Christmas or not). Our daughter has a few items on her list that we'll get her, but basically we've scaled down our Christmas shopping.
Gifts are not what it's all about, although I did enjoy giving to the children when they were smaller and had that sparkle of anticipation in their eyes. There are so many needy people that I've decided if I have the urge to spend money at Christmas, I'll donate to a charity.