Ok, we happen to love staying in Hall in Tirol. We've stayed at the Gasthof Badl 5 times so far during trips in 10/01, 10/03, 4/05, 12/10 and 12/13 for a total of over 16 nights. The old town of Hall in Tirol is very charming and the Christmas market there feels more "local" than most others. It's very convenient to Innsbruck. Innsbruck happens to be, simply put, magical at this time of year. The Nordkettenbahn in Innsbruck (as an alternative to the Zugspitze) will take you high into the Alps. We did this in early 12/10.
Check to see if you'll be in either the Salzburg or Innsbruck area during the "Krampus/Perchten" run or parade.
We also love Mittenwald. We stayed here in 5/05 and 10/06, but at this time if it's not during the limited Christmas Market there, it's extremely quiet. We visited again during our early Dec. 2010 trip and it was dead.
The Gashof Badl is a wonderful place to base. Nice rooms, terrific alpine views, an elevator, fantastic buffet breakfast (incl.), very good and reasonable restaurant and the owner/host Sonja and staff make you feel like family. They all go above and beyond to make sure your stay is perfect. Sonja will also help plan your sightseeing and activities if you like. She's a wealth of information on events, sights, etc.