We were in Chiang Mai just before Xmas last year.A good sidetrip is to Chiang Dao which is about 70 kilometres away and is at an altitude of 7,000 feet.
If you havent got your own wheels a taxi will set you back about 1,000 baht or there are about 6 buses daily from Chiang Mai with the journey time being around 90 minutes.
The area is very scenic and there are caves,hot springs and a National Park nearby. You can rent bicycles for around 100 baht a day or motorbikes for 250 baht a day.
There is a very good Tuesday morning market in Chiang Dao which features local and hill tribe goods.
Quite a few places to stay and eat in Chiang Dao now.The Chiang Dao Nest has accomodation and two excellent restaurants.....one Thai,one Western.....and a swimming pool.
Very cool at night at that time of year even for a hardy northerner like myself !

Its also worth spending a couple of nights in the old town part of Chiang Mai.Theres a superb English/Thai restaurant called the Old City Inn thats opposite the U-Hotel....great food and very affordable.
This road that runs from the Thapae Gate also has a Sunday Night Market which is very popular and sells just about everything.But,be aware,it gets very crowded and difficult to move in some parts.....it took me over 40 minutes to walk a mile !
You can hail down a red sangthaew that will take you anywhere in the old town for 20 baht per person.Saves the hassle of driving and you can enjoy a beer or two if you wish,without a problem.