Good Behavior

Have a manger and a bail of hay. When one child 'catches' another child
 doing something good that child gets a handful a hay and adds it to the
 manger. When the manger is full, the class gets a special snack.

Jesus in a Manger

Form a circle with one child in the middle as "Jesus."
 Have children hold hands and walk in
 a circle around Jesus. Lead kids in singing this song
 to the tune of "The Farmer in the Dell":

Jesus in the manger,
Jesus in the manger,
Hallelujah, hallelujah,
Jesus in the manger.

Jesus takes Mary (the child in the middle chooses someone
 to stand in the middle with him or her),
Jesus takes Mary,
Hallelujah, hallelujah,
Jesus takes Mary.

Use these additional verses:

Mary takes Joseph.
Joseph takes a shepherd.
The shepherd takes a wise man.
The wise man takes a star.

As the number of children in the center of the circle increases, the children forming the
 circle may need to drop hands and walk around the circle without holding hands while singing.
 
After everyone is in the circle or all the verses have been sung, have all the
 children leave the center of the circle except the star. Sing this last verse:

The star shines alone,
The star shines alone,
Hallelujah, hallelujah,
The star shines alone.

Christmas Crib

Have a basket or make a 'manger'. Have a pile of raffia or yarn pieces,
 about 8" for each piece. You'll need a lot of pieces. Put the crib in a
 high-traffic area. (Mine goes in front of Christmas tree.) Explain to all
 the kids that for each good deed that they do, they get to put a piece
 of 'straw' in the crib. To make a really soft bed for Jesus, they will need
 to do lots of good deeds. If they don't tell anyone the good deed, they
 get to put in TWO pieces of straw. On Christmas morning, put a baby doll (Jesus)
 in the crib. Have the kids help make 'swaddling clothes' out of strips of sheet.