For those of us who choose to decorate our homes with a real Christmas tree, there are steps we can take to keep that tree green, healthy and safe through the holidays. If you love the characteristic aroma of an evergreen tree, here's how to take care of its source.

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[edit] Steps

Choose a healthy tree. If possible, buy a Christmas tree from a tree farm, where you can choose your tree while it's still in the ground without removing a tree from a natural setting. A freshly cut Christmas tree will last longer than one that's been cut weeks ago and shipped to distant retail outlets. No matter where you're shopping, stay away from trees with a large number of dead or browning needles. Gently stroke a branch and make sure that the needles are flexible and remain on the tree. You can also lift the tree a few inches up and let it drop on the cut trunk, looking to make sure that outer green needles don't fall off (a couple dried, inner needles are all right).^[1]
Choose and clear a location for the tree. It should be kept away from open flames or heat sources, which may dry it out prematurely. Trees do some times burn so be careful (see Warnings below). If you'll be using lights to decorate your tree, it'll have to be close to an outlet or you'll need to run an extension cord from the nearest outlet. Be sure that if you use an extension cord, it runs along to wall and doesn't create a trip hazard. Corners are usually good because they keep the tree from getting knocked over.
Cover the floor where the tree will be placed. You can use a properly sewn tree skirt or be budget savvy and use Christmas-themed paper or a piece of satin fabric as shown. This will not only serve decorative purposes, but it will also help protect the floor in case any water splashes out. If you have a skirt that goes over the cradle, you can still place a barrier underneath the cradle and apply the decorative skirt after the tree has been mounted. Not only does it make the tree more presentable but it prevents pets from attempting to drink the water in the base.
Prepare the base of your tree. Using a small hand-saw, cut about a half inch to an inch off the bottom to aid water absorption. It is recommended that you don't cut the base at an angle or in a v-shape or drill a hole in the base, as it does not help water absorption and it also makes it more difficult to hold the tree in the stand.^[2]
Mount your tree within 8 hours of cutting the base, as that is how long it can go without water before absorption is jeopardized.^[3] A Christmas tree should never be mounted dry. It is much better to place it in a container of water that is replenished on a regular basis. You can buy special tree cradles or stands which screw into the base of the tree and provide watering space. Or, you can go for the rougher but tried-and-true method of using a bucket filled with small rocks (put the tree in, fill the bucket with rocks around the trunk). The tree should be provided with 1 quart of water for every inch in trunk diameter.^[4] Ensure that whatever you use, the tree is stable. Don't whittle down the bark of the tree just so that it can fit in the stand--that outer layer is the part that absorbs the most water.^[5]
Make sure the tree is straight. It is a good idea for at least two people to put up the tree, one holding while the other fixes the base. Always stand back to check that the tree is straight before you get busy decorating. Obviously, it is easiest to fix at this stage.
Water the tree. To start, you'll need to make sure your tree gets lots of water because in the first few hours that it's settled in, it will need plenty and will drink like crazy (possibly a full gallon on the first day!). (Also see TIPS below.) Afterwards, you will need to add water almost every day. Not only is it good for the tree's vitality, but a well-watered tree is also less dry and therefore, less combustible. Make sure you never let the water level go below the base of the tree. Some people put an aspirin in the water to help keep it fresh. Some also add Ginger Ale, Sprite™ or another similar soda drink (fizzy lemonade) to feed their tree. Be careful, though; if you accidentally bump the can whilst watering the tree, you might end up with very sticky presents!
Decorate the tree. For many, this is the most enjoyable part. It's also a good time to think about Christmas tree safety. Check each string of light to ensure that the bulbs are working properly. Inspect the cords to make sure they are not frayed, and that the connections are secure. Discard any that look questionable and replace them with new strings; they are not expensive items to replace, but your house is. A properly maintained Christmas tree should not be a fire hazard, as long as you use common sense in decorating it.
Check for sap leakage. It is a good idea to check occasionally for sap that has leaked from your tree onto nearby furnishings or floor coverings. The sooner you catch any sap leakages, the easier they are to remove.
Collect fallen pine needles. Use a dust pan and brush or a hand-held vacuum (many needles going into a larger vacuum can easily clog it up; this may even break the machine, whereas a hand-held version works well because you are obliged to keep emptying it as you work). This is a daily ritual, unless you want to have an enormous pile of needles to clean up when you finally move the tree. The needles are unsightly and potentially hazardous for curious pets and infants. A well-watered tree will lose fewer needles but all fresh trees will lose some needles.
Dispose of your tree as garden waste. Your tree has given you its life and has done a great service in being a part of your Christmas spirit. If your municipality has a tree collection program, you can make use of this. If you have room in the garden, you can leave your tree there until spring, when you can chip it into garden mulch.

[edit] Tips

Use LED Christmas lights to help keep down the heat on the tree (and also to conserve energy!). Turn off the lights when not in use to save energy and to lessen any potential for fire danger.
If you accidentally let the tree run out of water, it may dry out and shed its needles. The only way to solve this problem is to cut another inch off the base and water generously.^[6]
Try not to use water that's been treated through a home water softener system. Water softener water has high levels of sodium in it which will actually shorten the life of the cut tree. If possible, find a faucet in the house that is not "downstream" of the water softener. Otherwise, you can use distilled water or bottled water, but bottled water may also contain traces of sodium (but usually lower than water softener water).

[edit] Warnings

Remember never to leave lights on when no one is at home or everyone is sleeping.
Be careful when watering, since water and electricity do not mix well.
Don't overload electrical circuits.
Do not put flammable or heat-producing items close to the tree, ever. That means keeping such items as candles, TVs, stereos, electric heaters etc. well away from the tree.
Cats and dogs are notorious for knocking down Christmas trees and making a big mess. If you have a cat,a dog or other pet in the house, keep them out of the room where the tree is located or take steps to dog-proof or cat-proof your Christmas tree.