The only bad thing about wrapping it the wasteful pile that grows next to the tree as the family tears open gift after gift. So over the past several years I've tried to be creative about how we wrap so that I still get my fix without being wasteful.
(1) Cloth Bags. I've collected mine over the years from http://www.wrapsacks.com but you crafty mamas who sew can whip up a drawstring bag in no time. You can also get them on etsy. We have them in all shapes and colors and use them for in-family gift giving so that we have them year after year for birthdays, winter holidays, etc. To me they are even more festive than paper wrap.
(2) Festive Recycling. Of course wrapping a gift in the Sunday comics is nothing new. But around the holidays, I seek out the really pretty stuff. Our local grocery store has a TON of free local newspapers and magazines. And around November and December they all have nice cover shots and nice inside spread of snowmen and trees with lights and santas and the like. These papers are already printed and get tossed into the trash or recycling bin anyhow, so we look through and pick the ones that have good pages to use and bring them home to wrap.
(3) Simple Yet Classic. Plain brown paper. Once in a while I have been known to forget my cloth grocery bags at home. And so we have a small collection of paper grocery bags. Plus the craft paper that was used to pad the boxes of some larger items that were shipped to us this year (our new heater, etc). Wrapped up with a beautiful ribbon and something to decorate (like a bell, beeswax ornament, some fresh holly) and it looks gorgeous! (you can see the cloth bags in the pile as well)