Originally Posted by http://dictionary.reference.com/search?q=xmas

Xmas has been used for hundreds of years in religious writing, where the X represents a Greek chi, the first letter of, “Christ.” In this use it is parallel to other forms like Xtian, “Christian.” But people unaware of the Greek origin of this X often mistakenly interpret Xmas as an informal shortening pronounced (ksms). Many therefore frown upon the term Xmas because it seems to them a commercial convenience that omits Christ from Christmas.