It seems like hitch is more critical about the actions rather than the underlying meaning and intent behind certain practices...
JJ is correct in saying that Catholics are not idol worshipers... There's quite a difference between giving something deference because of what it represents and actual worship. True, the action of saying prayers while kneeling before a statue of Jesus' crucifix may appear as worshiping that statue to a non-Catholic, but the same assumption could be made if they saw a JW reading the Bible. Or are you an idol worshiper when you read the Bible, care for it, ensure that others don't abuse it, etc? After all, the Bible isn't any different than any other book in terms of its physical composition... Similarly, giving deference to the mother of God's son doesn't mean we worship her. Out of all of humanity, she was hand-picked by God to birth Jesus, so why is it so terrible to show her respect for what she had accepted.
Finally we can safely conclude that Jesus wasn't actually born on December 25th, not because of the Bible, but rather through non-Christian, historical accounts we know that the Roman Emperor Constantine allowed the Christian celebration to coincide with the Roman's pagan celebration. But just because the earliest Christians arbitrarily decided to hold their celebration at the same time as the pagans doesn't mean they are celebrating the pagan's holiday in terms of what the celebration is for. Giving gifts and acts of charity during this season also has pagan origins, yet the early Christians saw this as a parallel with the spirit of Jesus' teachings and so too kept these traditions. So does God also disapprove of feeding the hungry and giving to those in need just because they have pagan roots?! Again the intent of "do unto others as you would have done unto you" seems more important to God that can read your innermost thoughts and desires than performing the action of the pagan custom of gift giving.
As for the reason why these early Christians decided on this date, part of it has to do with that Roman pagan holiday; it was the called the "birthday of the Unconquered Sun", the pagan god Sol. However the early Christians noted that in the Bible (emphasis added by me):
4:1 See, the day is coming, burning like an oven, when all the arrogant and all evildoers will be stubble; the day that comes shall burn them up, says the Lord of hosts, so that it will leave them neither root nor branch. 2 But for you who revere my name the sun of righteousness shall rise, with healing in its wings. You shall go out leaping like calves from the stall. 3 And you shall tread down the wicked, for they will be ashes under the soles of your feet, on the day when I act, says the Lord of hosts.
-Malachi 4:1-3
so what would be more fitting than to celebrate the "birthday of the Unconquered Sun" then with the birthday of the unconquered Son of God, the sun of righteousness. Furthermore, the early Christians were being persecuted by the Romans in the first few hundred years after Jesus, so many of those early customs were taken from pagan sources in order to hide their true beliefs lest they too be killed. Intent: celebrate the birth of our Savior, the Son of God vs. Action: hold that celebration at the same time as a pagan celebration; which is more important with God?
And where in the Bible does it say that Satan had anything to do with Christmas or the star that the wise men / magi were following? Matthew chapter 2 just mentions that they asked King Herod where they could find the King of the Jews since they had been following this star; Satan was never mentioned as tricking the magi into the visit. Also, although it's possible that Satan may have directly prompted King Herod to have the magi report back to him, I think it's more likely that it was simple human hubris and desire for power, esp. if the magi referred to Jesus as the King of the Jews (for Herod had already been named such by the Roman Emperor Augustus / Octavian). Or it could have been that Herod "the Great" was going insane as evidenced by his earlier, paranoid decrees and the fact that he had several of his own sons killed.