I've been a few times and yes, it's lovely. Christmas market in the main historic square is rather underwhelming, I have to say, though there's a very big general market on Saturdays out on the fringes of town which is lively and busy, but has the normal sort of stalls (clothing, bags, food etc).
If you like chocolate, there are something like 47 chocolate shops, so that'll keep you busy 
The Memling Museum is great if you like art/culture, and I highly recommend a walk to the Begijnhof (almshouses) which are lovely and very picturesque.
I'd also recommend the Gruuthusehof restaurant if you want a 'special' meal; its tourist menu is really good value and delicious (despite being called a tourist menu, iyswim). But I'd steer very well clear of the restaurants around the main square.
If you're there for a few days, it's an easy train ride to Ghent, another very historic Flemish town.