First tall in the back smaller as each row come forward and/or as you more to the middle of the group.
Set grandma in middle if possible. Go with family members together as long as it does not break the structure above.
A bigger room or if not to cold go outside were back grounds can be moved farther away and when combined with large fStop (the smaller number) depth of field can be reduce and the background blurred into contrasting colors.
I suggest that you request that the people don't dress up to Chistmas colory, more like go to Church dress. This will reduce contrasting colors,shapes and lines and makes the picture more useful for any occasion. If you want to add Christmas do it with back ground, like a decorated house.
Try to plans the shot(s) ahead to reduce the group having to sit to long (baby won't like it).
You might want to try sports mode to get several shots at a time, you may find the babies and others will look at the camera after the first flash
and the next picture if taken quick may be better. You can use a timer combined with exposure bracketing to get serveral shots at a time if you want to be in the picture as well. Let every one know to sit still after the first flash if your flash recharge is slow.
Other hints;
Use a flash for fill lighting - inside bounce off ceiling - outside more stright on - use a diffuser in both situations, if you can get one.
Practice with camera and defferent setting to get camera to do what you want and then write down the best setting for easy reference.
Take picture slightly wider than you may want for finish product, you can always crop for final postion and centering but you can't add that shoulder that got cut off because Uncle Fred moved after framing.
Try a few shot from slightly above center positon. This will get people to look up a little removing dubble chins and helps get eye open eyes and people sitting up streight.
Fresh batteries in all equipment, empty memory card and review camera setting before collecting the group. Relax have fun.
