What is the significance of Holly and Mistletoe?

Like most every Christmas tradition except attending a Christian church and singing "Hark! The Herald Angels Sing," holly (and it's counterpart, ivy) became connected to Christmas through pagan traditions.

Several species of holly are evergreen plants, and in just about every European winter celebration tradition, evergreen plants were important--holly, ivy, mistletoe, and coniferous trees (like Christmas trees). They didn't die as the days got shorter and colder; they were a sign, in a dead winter landscape, that life would return. Holly in particular was associated with Dionysus in the Greek tradition, as well as some Pagan sun gods. In the Middle Ages, there was a tradition of presenting King Holly (seen as a male plant) with Queen Ivy (a female plant) in midwinter customs. As all these old winter traditions gathered around Christmas in the Middle Ages, so too did holly become associated with the holiday.

Nowadays, Christians often view the prickly leaves and red berries of holly as symbolic of the crown of thorns Jesus wore during his legendary crucifixion (the berries are blood drops).