OP, we have ended up in a similar position to you, facing separation right on top of Christmas. We split up in early November but are still living together, 2 dc aged 4 and 1, and decided not to tell our oldest until xdp had a place sorted to go. This has taken a while, and he gets his keys on 10th December, so we are facing telling ds this weekend.
I feel bad that it is right on top of Christmas, but it is just the way it has worked out, and we are hoping to minimise the pain over Christmas by spending the day as a family, the morning at xdp's new house and the afternoon at mine. I think that if you are confident you can show a happy united front for Christmas day that will be the day that sticks in your dc's minds, whether he is staying the night or not.
A couple of people have said to me that Christmas will be a good distraction for our ds at a difficult time as well. I am sure that they are picking up on tension at home anyway at the moment, and I am certain that is more damaging than a clean and quick split if at all possible, no matter what the time of the year. If you continue as you are for another 3 weeks it may be a worse day for the dc's if there are arguments and a bad atmosphere. It is incredibly tough living under the same roof once you have made the decision to split.
Also, it may take a while to sort out alternative accommodation for your dp anyway, so even if you get the ball rolling now it may not be until after Christmas he has to move out anyway.
Good luck.