Two days ago I was on the Christmas market in a town near me. I forgot my camera, so I took some pics with my cell-phone. Alas, the quality is not the best, but it gives you an impression:
Wooden Christmas decorations for sale:
This one is better:
The wooden figures on the lower shelf in the second pic are Räuchermänner ("incense smokers"). You put those little incense pyramids into the figures, then the smoke comes out of their mouths. There are many different scents to choose from.
This is how the incense pyramids look like (pic from the internet, not by me)