SmartMoney's Holiday Gift Guide

There's never a good time for an economic disaster. But combine the current crisis with the $460 billion holiday shopping season and everyone but the Scrooges of the world will be feeling the crunch. The bad news -- if you're a retailer -- is that the luxury market, long considered the industry's most bulletproof sector, is tumbling as badly as the rest: Neiman Marcus, Nordstrom and Saks Fifth Avenue have all recently reported double-digit monthly sales declines, and a recent survey found that more than 80 percent of households with $100,000-plus discretionary incomes are now waiting for items to go on sale before they buy. "People are cutting back at every level," says Jim Taylor, vice chairman of the Harrison Group, which coauthored the study with American Express Publishing.

Photo courtesy of Crate and Barrel

If the idea of a staycation sounds ominously like a one-way ticket to cleaning out the garage, it may be that you're missing the crucial piece of chill-out equipment: a leather club chair. And while it may not come standard with a beloved pooch, cashmere throw and gin martini, it often ends up earning pride of place in front of the fireplace or big-screen TV. Sales of leather furniture have taken off in recent years, now accounting for a full quarter of the home furnishings market, but experts caution buyers to choose carefully, since much of that spike has come on the lower-quality end.

To avoid lemons, do more than just sit: Ask questions. The best chairs are constructed with a sturdy hardwood like maple and have padded strings in the seat for maximum support. Padding should be foam, feathers, or, ideally, something firmer like horsehair. Top-of-the-line leather, called "full grain," is less heavily treated than lesser skins, which lose their natural suppleness with over-processing. Bruce Goff, senior designer at San Francisco interior design firm Domus Design Group, recommends the pinch test; high-quality leather will quickly spring back into place, while a cheaper material will retain the pucker. Our pick, the Crate & Barrel Metropole Chair ($1,999) features "distressed" brown leather accented with nailhead trim -- traditional without being fussy. And the commodious mohair-covered seat is firm enough to be supportive, but supple enough to sink into with a happy sigh. Now, where's that martini?

Photo courtesy of Jamaica Villas by Linda Smith

For more travelers these days, the smart indulgence is a home away from home. While luxury hotels are quietly dropping rates, rental outfits have also cast a wide welcome mat with incentives like seven nights for the price of five. What's more, rental homes are being increasingly perked out, hotel-style, so travelers can enjoy the space and privacy of, say, a rustic farmhouse, without giving up amenities like a fitness room or well-stocked wine cellar. And more rental firms offer villa guests services like activity planning and in-home massages.

For some of the best deals, more travelers are bypassing traditional villa hot spots like Italy, France or the Caribbean for destinations where they are a lesser-known holiday option, like California wine country or Costa Rica. But the reeling economy has brought even some old favorites into play.

Serenity on the Beach (via Jamaica Villas by Linda Smith), boasts four bedrooms, a freshwater swimming pool, and semi-private beach and tennis court (shared with a neighboring villa). Rates, which start at $3,900 for seven nights, include guest privileges to the exclusive Round Hill Hotel & Beach Club. But what really pushes it into luxury land is the staff -- including cook, butler, laundress and chambermaid. Home-cooked meals on the seaside verandah, anyone?

Photo courtesy of Bergdorf Goodman

Sartorial legend has it that, in 1837, the commander of the frigate H.M.S. Blazer, anticipating an inspection by the young Queen Victoria, spiffed up his motley crew with new uniform jackets sporting snazzy, sun-glinting brass buttons. True or not, the blazer has been smartening men's silhouettes ever since -- from crusty yacht clubbers to hip night clubbers dressing up a T-shirt and torn jeans. Looking to splurge on a cashmere sport coat? With China now manufacturing cashmere goods -- not just exporting the supersoft wool to more expensive European makers -- prices in the last five years have dropped considerably, says Stephen Pruitt, senior analyst at retail research firm Black's Consulting. Now, he says, cashmere outsells wool nearly four to one in high-end U.S. stores.

But while blazers made of 100 percent cashmere can set you back $2,500 or more, there's a more affordable alternative. According to Andy Gilchrist, author of The Encyclopedia of Men's Clothes, cashmere blended with silk or wool actually produces a stronger, more durable weave for far less -- without sacrificing the alluring softness. Of course, the mere presence of cashmere doesn't guarantee quality, so pay close attention to details of construction and fit, like hand-stitching and pattern-matching at the seams. Our favorite, a handsome navy two-button blazer by Cantarelli ($1,395), wins not only for its sumptuous feel, but for its fine Italian tailoring and understated classic styling. Somewhere, Commander Blazer is saluting.

Nothing kills the buzz of schussing down a powdery slope faster than fat blisters on your feet -- or a painful case of popsicle toes. That's why, experts say, your best mountain investment isn't fancy skis or private lessons; it's a pair of perfectly fitting boots. Increasingly, devotees of the "steep and deep" are opting for high-performance footwear; in the 2007-08 season, according to the SnowSports Industries America, sales rose 18 percent over the previous year, while recreational ski boot sales fell 14 percent.

What's the key difference between a high-performance ski boot and the entry-level variety? For starters: "better lining materials, better buckles and better plastic," says Jeffrey Rich, director of the U.S. Orthotics Center, a New York-based custom bootfitting and footbed facility. Most important are the liners. Top models sport customizable, heat-moldable lining material, professionally form-fitted to your feet, like the orthotic inserts that runners often use. The advantage, says Rich: "A snappier, more lively energy return." That's ski-boot-speak meaning that, without air gaps or thick, blocky padding, you can feel -- and surf -- every subtlety of the slope with greater responsiveness, balance and power. That's why our favorite is the Salomon Impact 10 ($599). Relatively lightweight, its outer shell is graduated in its thickness -- with more, stiffer plastic where maximum support is needed -- and a double heat-moldable liner that offers impressive foot-wrapping fit. All of which means a better mountain mojo.

In good times and bad, Americans tend to love their wrist bling. But in this economy, it's pretty certain that fewer people will be springing for that platinum Patek Philippe.

Indeed, with prices for many high-end dress watches still topping $5,000, savvy shoppers are increasingly turning to the more versatile -- and affordable -- sports watch. To help us pick one that will, well, stand the test of time, we talked to Paul Boutros, a New Jersey-based sports-watch collector who owns about 150 timepieces. Sure, watch companies tout high-tech materials like titanium and superlight carbon fiber, he says, but it's tough to beat plain old steel for durability. And don't shy away from a little extra size; a 38- to 43-mm face not only looks sportier but also makes chronographs and altimeters easier on the eyes. Finally, he counsels, if you want a watch that can actually get in the game, stick with battery-powered quartz models, since the impact from hitting a golf or tennis ball can damage more-fragile mechanical watches. Our choice, the $2,000 TAG Heuer Aquaracer, is water-friendly up to 300 meters and sports a spiffy stainless steel bracelet and scratch-resistant crystal sapphire case.

Analysts say the unraveling economy may actually be a boon to sunglasses sales, since fashionistas wincing at prices for high-end handbags can still scratch their shopping itch by snapping up a favorite designer's shades instead -- and for a fraction of the cost. So on a cloudless day in Bryant Park, scene of New York's Fashion Week, we're sharing some unseasonable weather with Tamara Rappa, a veteran of countless runway shows and celebrity stylist to the likes of Meg Ryan and Scarlett Johansson. Before us: a tableful of designer shades that might lend even the most Wall Street weary a little red-carpet cachet.

According to Rappa, the right shades can be sophisticated and versatile enough to wear with everything from cocktail dresses to yoga pants. Trying on the glasses (and checking them out in her Chanel compact), she blows through pair after pair, dismissing a cream-colored example as too summery and the glitzy aviators for their "MTV vibe." Finally, she settles on a favorite: The David Yurman Waverly ($325) from the jewelry company's first-ever sunglasses collection have a vintage feel but without the bug-eyed look of some "Jackie O" styles. And the signature twisted gold temples add a unique touch, says Rappa: "Like a sunglass and piece of jewelry at the same time."

We admit we've never seen the appeal of health drinks. Wheatgrass? We'll take a pass. As for protein shakes, call us when they add ice cream. But there's one that's just our speed: organic wine. Though it still represents a tiny piece of the $30 billion U.S. wine market, experts say the growing demand in all things organic is prompting more grape growers to go green.

But what exactly is organic wine? To find out, we stop by Counter, a Manhattan vegetarian restaurant serving more than 250 eco-friendly bottles, where owner Deborah Gavito and General Manager Frank Cisneros walk us through the basics. Certified-organic vintages don't include added sulfites, which prevent spoiling. More common are wines that do contain the preservative but are certified as using organically grown grapes. Finally, there are the biodynamics, which are not only made with organic fruit but also are grown on vineyards that practice new-agey farming traditions, like planting according to the lunar calendar.

But how do they taste? As with any wine, says Gavito, the key to picking the best organic is just to concentrate on what you like. Indeed, we savor the "big-bodied and jammy" Grgich Hills Estate zinfandel, but we can't muster much affection for the wines with a nose of "barnyard." Our winner, the 2004 Benziger Tribute ($432 for a half-case), got raves all around. Gavito praises the cabernet blend's subtle flavor, while Cisneros likes the way it lingers on the palate. "The finish is still going," he marvels. "Delectable."

Photo courtesy of Blue Nile, Inc.

Diamonds may seem like a let-them-eat-cake gift choice during a financial crisis. But now may be the perfect time to splurge on a little sparkle, since dealers are feeling the heat, not just from the economy but also from new online competition and the nascent market for lab-produced, or "cultured," diamonds. (Graded by the Gemological Institute, they're typically 15 percent cheaper than natural stones.) Says Ken Gassman, president of the Jewelry Industry Research Institute, "Diamond prices look better than they have in years."

As every rock hound knows, quality boils down to the "four C's": color, clarity, cut and carats. But whether you choose natural or synthetic, clear or colored, sorting out a diamond's merits can be tricky, so ask for independent grading scores from a certified assessment lab. Looking for the perfect pendant? Forget big bling, says Constance White, style director for eBay. To complement today's refined styles, she says, go for elegant and understated: "Think more Grace Kelly and less Elizabeth Taylor." Which is why our winner is the $2,500 Three-Stone Pendant from online jeweler Blue Nile. With a center stone weighing in at half a carat, the necklace doesn't skimp on sparkle, while the subtle white-gold chain and three-diamond design make it as perfect with a business suit as with a ball gown. We think Her Highness would approve.

Photo courtesy of Canon U.S.A.

Ever screen a home movie on a huge LCD TV -- and cringe at how lousy it looks?

We're watching raw New York street-scene footage with Mark Smith, a cinematographer whose work has appeared on the Discovery and History Channels, and as soon as we hit "play," he's getting excited. The skin tones look natural, he says; the colors aren't oversaturated, and the patterns on women's dresses are crisp.

Did we mention that he shot these images with a high-definition camcorder that weighs less than a pound? Today about half of all households own a camcorder, but HD models let you capture your kids' sports tournaments in the kind of vivid, piercing detail that you see, say, on ESPN. And although the prices (average: $1,000) are roughly three times that of the regular models, HD camcorder sales are forecasted to nearly double this year, even as camcorders overall drop 9 percent, says Shawn DuBravac, an economist with the Consumer Electronics Association.

These powerhouse cameras are surprisingly small and light. Top models flaunt fancy features like "face detection" and "smile shutter," which snaps stills (along with the video) whenever someone smiles. But the Canon Vixia HF11 ($1,200) wins for simplicity and image control. Smith likes its easy menu and convenient controls -- such as a record button for each hand. And while the auto focus needs adjusting to keep it from zeroing in on the wrong thing, its silky-smooth zoom and image-stabilization features minimize jerkiness. It all adds up, says Smith, to that big-screen wowza factor: "This is good-looking video."