Speaking as someone who has taken proverbial dips in the company pool, I can honestly say that dating a co-worker isn't a great idea, but sometimes it works out (and by "works out," I mean you'll date for a while and then it will end horribly). Dating a co-worker is something that lazy and/or busy people do. For those of us who don't have any game, and need to draw the courtship process out over weeks and months, it's awfully convenient. The object of your affection is pretty much forced to deal with you on a regular basis -- in other words, you only have to be a better option than the rest of your co-workers (office hot).
This time of year presents an entirely different problem: the prospect of the office party hook-up. I've been in a couple of situations in which I've been very close to a co-worker, and, thanks to untold amounts of booze, had the opportunity to seal the deal. Holidays are wrought with such opportunities, but before you get busy in the broom closet, there are a few things you may want to consider.
The main problem with the office party hook-up is, because it usually follows a drunken night of sloppy flirting in the open, it's more than likely everyone else in the office will know about your holiday hoe-ery. Ask yourself: Is a night of awkward, slapdash sex worth the hit to your reputation? The answer usually depends on how much booze you've had, and how long the sexual tension has been building. If the night of the office party is the first time it's ever occurred to you that a particular co-worker is attractive, it might be wise to pass. Unfortunately, because of the double-standard that men enjoy (but pretend to hate), a woman's reputation will take more of a hit than a man's.
Of course, if you're one of the sexually liberated types who doesn't share most people's Victorian views on sex, then just have another drink and see whose bed you wake up in.
Another problem is you will have to see one another again. A lot. It's not like you went to a bar and wiped some stranger off a barstool. What if the co-worker you hooked up with had/or has developed feelings for you, and you don't share them? Then you've reached a new echelon of awkwardness -- not to mention you might genuinely hurt someone's feelings. If the person with whom you did the deed is, say, crazy, then you could have just opened a Pandora's box of bitter feelings and revenge motives. Depending on how tactfully you let your hook-up down, it might actually affect your ability to do your job.
If you do hook up and feel regret, the best thing to do is get the awkwardness out of the way. Don't string along a co-worker like some empty port that you only visit during a storm. That's what bar hook-ups are for. Just talk to the person whose stockings you stuffed, and see how he/she feels about the encounter. Most importantly, be honest. There's nothing worse than dragging out an office romance just to spare someone's feelings.
Holidays are an emotional time, and office parties are a great way to release work stress. Just make sure you don't get caught up in the moment, under the influence of too much 'nog. But if you do end up in a relationship with your office holiday party hook-up, at least you'll have work gossip to talk about -- then again, that might be the worst fate of all.