I enjoyed it very much - not quite a vintage episode, but after the very below par 2008 Christmas special I'm glad things are back on track (and that they've stopped setting episodes outside the Royle house). It's sad that Mary was killed off though.
My only real gripe is that the excuses for Dave and Denise's kids not to be around are getting tenuous. Denise was always portrayed as a lazy cow but I couldn't see her leaving the kids at Christmas.