[Update two: The Holiday Auction is back online. Auction timing remains the same: The first auction will end at 7:45 am PST on December 15, with auction rounds following every 45 minutes thereafter until 10 am PST on December 18.]
[Update: Valve has suspended the Holiday Auction over concerns, according to this Reddit thread, that an exploit is allowing users to duplicate gems. "Sorry, but there have been some issues with Gems and the Steam Holiday Auction has been temporarily closed," the auction page now says. "The elves are working frantically to get the issues sorted out, and the auction will start again as soon as they're done."]
Got a tonne of backgrounds and emoticons in your Steam inventory that you don't know what to do with? Steam has an answer for everything, it seems. Starting December 15, the Steam Holiday Auction will allow you to turn Trading Cards, backgrounds and emoticons into Gems, which you can then use to bid on 200,000 games in the Steam library.
The auctions will run from December 15 at 7:45am PST through to December 18, 10am PST. Auction rounds will last for 45 minutes, with each featuring a different selection of games. Sensibly enough, the highest bidder for each title wins. There are 133 pages of relevant games listed on the Auction page, with Counter-Strike: Global Offensive, The Forest and Arma III some notable examples. You can also bid on a 2014 Holiday Profile, if that's the kind of thing you're into.
Full rules are over here, and they seem pretty straightforward. A couple of things to keep in mind: there's a bunch of games on Steam that reward Trading Cards simply for playing. You can find out which games in your library apply on your Badges page. Steam also advises that you're better off crafting Trading Cards into badges and then transforming those into Gems, because that will often reap higher Gem rewards.
Oh yeah, and it looks like the Steam Winter Sale will begin next week, so it's a terrible time for anyone with backlog anxiety.