We went to Sharm in December 2005 and the weather and the hotel was perfect.It cost us less than £500 for 2 weeks.Its best if you look at the hotel review section then look for the best deal for that hotel.December is usually a good month for late deals so I would wait a while before booking.

We have been to Sharm twice in Decembers, first to the Conrad and next to the LTI Grand Azure. The sea at the Conrad was warmer than the pool and the fish are fantastic. The LTI is probably a better hotel amenity wise and has an outdoor heated pool (1) but the sea and fish are harder to get too. We spent all our time on the beach and in the sea or in the case of the LTI trying to get into it!
Quite a few of the hotels have a heated pool or indoor one and if you can snorkel, I have been told that the fish are as good as the barrier reef and you just have to walk to the beach! The saunas are not mixed so we didn't bother in either hotel. Also not a keen Jacuzzi fan so can't help on that one. 2005 Conrad holiday was £250 each and last Decembers (2006) was just over £300 I think.

Thanks for your replies I will look at the hotels mentioned, I wanted an indoor pool if we decide on the Canaries as the pools will be freezing in December!

Tunisia has alot of good value AIs - but you would definitely need one with an indoor pool, as it would be too cool to swim in the sea or outdoors at this time of year.

Fortunately there are lots of these such hotels in Tunisia, and the cooler (but normally sunny weather) makes it an ideal time to do some of the really fascinating desert trips they have over there.