A decorative little knick-knack to hang from your Christmas tree. Some of them are family heirlooms dating back decades or more (my parents have one glass ornament that's over 100 years old -- it's hung very, very carefully in the upper branches of the tree) -- and some of them are less expensive. You can often get some fairly cheaply at many stores, and you can also make them yourself. But it doesn't matter if you paid a lot for your ornaments or a little, as long as they make your tree look good.
When I was very young, I'd sit on the floor in front of the tree and imagine that the ornaments could talk to each other. The ancient glass orb would tell stories about Christmases Past to the laughing elf and the yarn angel, the various glass bells would gossip about all the new ornaments, and the electric lights would sing the Baby's First Christmas ornament to sleep every night (in my personal Christmas cosmology, all the lights could do was sing Christmas carols -- they knew a lot of 'em, so it didn't get monotonous). Once I fell asleep by the tree listening to Christmas ornament stories, and my dad snapped my picture, curled up in a chair, sound asleep, lit by the dim glow of the Christmas tree...