This is a method of exchanging gifts amongst a group of people. All members enter their name into a pot. Then each member draws a name. You buy a Christmas gift for the person whose name you've drawn. You're supposed to keep the name of person you've drawn secret: thus "secret" santa.
Due to 8 years of Bush regime rule, we are now too poor to buy each member of the family a gift, so we'll do secret santa this year.