The tradition is typically described something like this:
Germans parents hide a glass pickle ornament on the Christmas tree once all the other ornaments have been hung. On Christmas morning, the children search the tree for the glass pickle. The child who finds it receives a special present and unwraps it before the opening of the other presents begins.
A search on Google – or a visit to any Christmas store – will offer up glass pickle ornaments (many made in Germany) for sale. Ask a German about the tradition, though, and you may get a blank stare.
It turns out the German "tradition" may be an American invention. On one hand, it does seem to be true that more Americans know the story than do Germans. On the other hand, many sources credit Germany as being the origin of blown glass ornaments. On the other hand...well, I'm out of hands.
Maybe it doesn't matter. Go ahead and hang a glass pickle on your Christmas tree. Jewish? Make it a kosher-dill :)