The Christians in Santa Monica are getting around the ban on nativity scenes in the public park by participating in living nativity scenes and singing, not to mention handing out cocoa and cookies. This doesn't count under the ban, as it's not a permanent display (though it's going on from now till December 23).
Quotes from Christians involved:
"The nativity scenes have been a positive thing for the whole community... and we want to keep it that way."
"We're here to communicate the true message of Christmas, which is Jesus."
"We just want to give back to the community and share with them what we believe is the true message of Christmas."
Note again that the previously displayed nativity scenes are still going to be visible, just on private land. So it's not as if Christmas has been exiled from the city of Santa Monica forever. But to listen to these people, you'd think the lack of a nativity scene was a catastrophe that must be remedied at once.
I'm no lawyer, but I would think this would certainly be permissible as free speech (though one would think a permit might be required for something of this duration and magnitude). But of course if the city doesn't object, then atheists also have a right to go hand out cocoa and cookies in the park and put on a display. They should put up a sign: Come to the Dark Side. We have cookies!